Quite a few insiders have dramatically grown their holdings in Linamar Corporation (TSE:LNR) over the past 12 months. An insider’s optimism about the company’s prospects is a positive sign.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Linamar
The Last 12 Months Of Insider Transactions At Linamar
In the last twelve months, the biggest single purchase by an insider was when Executive Chairman of the Board & CEO Linda Hasenfratz bought CA$3.3m worth of shares at a price of CA$66.23 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$75.76), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn’t tell us much about how insiders feel about the current share price.
Happily, we note that in the last year insiders paid CA$3.5m for 53.93k shares. On the other hand they divested 55.47k shares, for CA$3.5m. Overall, Linamar insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Linamar Insiders Are Selling The Stock
Over the last three months, we’ve seen a bit of insider selling at Linamar. The selling netted CA$48k for insider Alexander Drolc. But the good news is that there was purchasing too , worth CA$14k. While it’s not great to see insider selling, the net amount sold isn’t enough for us to want to read anything into it.
Insider Ownership Of Linamar
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that Linamar insiders own 34% of the company, worth about CA$1.6b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Linamar Insider Transactions Indicate?
We note that there’s been a little more insider selling than buying, recently. But the difference is small, and thus, not concerning. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Linamar insiders think the business has merit. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. Every company has risks, and we’ve spotted 1 warning sign for Linamar you should know about.
Of course Linamar 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, but not derivative transactions.
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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.
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