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We often see insiders buying up shares in companies that perform well over the long term. 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 we’ll take a look at whether insiders have been buying or selling shares in
Canopy Growth Corporation
(
TSE:WEED
).
What Is Insider Buying?
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, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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.’
See our latest analysis for Canopy Growth
Canopy Growth Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by President & Co-CEO Mark Anthony Zekulin for CA$23m worth of shares, at about CA$64.70 per share. So what is clear is that an insider saw fit to sell at around the current price of CA$64.42. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
Over the last year we saw more insider selling of Canopy Growth shares, than buying. The average sell price was around CA$62.14. It’s not particularly great to see insiders were selling shares at below recent prices. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
TSX:WEED Insider Trading February 1st 19
If you like to buy stocks alongside management, then you might just love this
free
list of companies. (Hint: insiders have been buying them).
Canopy Growth Insiders Bought Stock Recently
At Canopy Growth,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, David Bigioni bought CA$162k worth of shares in that time. But we did see Director Robert Hanson sell shares worth CA$149. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Story continues
Insider Ownership of Canopy Growth
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Canopy Growth insiders own about CA$152m worth of shares (which is 0.7% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Canopy Growth Insiders?
The recent insider purchase is heartening. But we can’t say the same for the transactions over the last 12 months. The high levels of insider ownership, and the recent buying by an insider, suggests they are well aligned and optimistic. Of course,
the future is what matters most
. So if you are interested in Canopy Growth, you should check out this
free
report on analyst forecasts for the company
.
Of course
Canopy Growth may not be the best stock to buy
. So you may wish to see this
free
collection of high quality companies.
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
.
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