IGM Financial Insiders Sell CA$29m Of Stock, Possibly Signalling Caution
The fact that multiple IGM Financial Inc. (TSE:IGM) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
IGM Financial Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Director, Robert Orr, for CA$9.0m worth of shares, at about CA$90.35 per share. So what is clear is that an insider saw fit to sell at around the current price of CA$83.00. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
Insiders in IGM Financial didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Check out our latest analysis for IGM Financial
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
IGM Financial Insiders Are Selling The Stock
The last quarter saw substantial insider selling of IGM Financial shares. In total, insiders sold CA$10m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that IGM Financial insiders own 0.08% of the company, worth about CA$15m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About IGM Financial Insiders?
Insiders sold IGM Financial shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since IGM Financial is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing IGM Financial. In terms of investment risks, we've identified 1 warning sign with IGM Financial and understanding it should be part of your investment process.
Of course IGM Financial may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.