We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell George Weston Limited (TSE:WN), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
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The Last 12 Months Of Insider Transactions At George Weston
In the last twelve months, the biggest single sale by an insider was when Camilla Dalglish sold CA$3.5m worth of shares at a price of CA$104 per share. So we know that an insider sold shares at around the present share price of CA$92.76. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.
In the last twelve months insiders purchased 9.85k shares for CA$965k. But insiders sold 33.99k shares worth CA$3.5m. All up, insiders sold more shares in George Weston than they bought, over the last year. The average sell price was around CA$104. It’s not ideal to see that insiders have sold at around the current price. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
George Weston is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at George Weston Have Bought Stock Recently
At George Weston,over the last quarter, we have observed quite a lot more insider buying than insider selling. 2 insiders bought CA$397k worth of shares. But we did see Executive VP & Chief Talent Officer Rashid Wasti sell shares worth CA$18k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. George Weston insiders own 3.3% of the company, currently worth about CA$463m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At George Weston Tell Us?
The recent insider purchases are heartening. On the other hand the transaction history, over the last year, isn’t so positive. The high levels of insider ownership, and the recent buying by some insiders, suggests they are well aligned and optimistic. Of course, the future is what matters most. So if you are interested in George Weston, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.