Insider Sellers Might Regret Selling ThreeD Capital Shares at a Lower Price Than Current Market Value
Even though ThreeD Capital Inc. (CSE:IDK) has fallen by 14% over the past week , insiders who sold CA$1.8m worth of stock over the past year have had less luck. Insiders might have been better off holding onto their shares, given that the average selling price of CA$0.15 is still below the current share price.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
ThreeD Capital Insider Transactions Over The Last Year
The Founder Sheldon Inwentash made the biggest insider purchase in the last 12 months. That single transaction was for CA$630k worth of shares at a price of CA$0.06 each. That means that an insider was happy to buy shares at around the current price of CA$0.06. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.
In the last twelve months insiders purchased 17.76m shares for CA$1.5m. On the other hand they divested 11.65m shares, for CA$1.8m. Over the last year we saw more insider selling of ThreeD Capital shares, than buying. The average sell price was around CA$0.15. Insider selling doesn't make us excited to buy. But the selling was at much higher prices than the current share price (CA$0.06), so it probably doesn't tell us a lot about the value on offer today. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
View our latest analysis for ThreeD Capital
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. ThreeD Capital insiders own about CA$2.2m worth of shares. That equates to 39% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About ThreeD Capital Insiders?
The fact that there have been no ThreeD Capital insider transactions recently certainly doesn't bother us. Our analysis of ThreeD Capital insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that ThreeD Capital is showing 6 warning signs in our investment analysis, and 5 of those don't sit too well with us...
But note: ThreeD Capital may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.