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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Interfor Corporation (TSE:IFP), it sends a favourable message to the company's shareholders.
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.
Check out our latest analysis for Interfor
Interfor Insider Transactions Over The Last Year
The President Ian Fillinger made the biggest insider purchase in the last 12 months. That single transaction was for CA$101k worth of shares at a price of CA$18.48 each. That means that an insider was happy to buy shares at above the current price of CA$15.58. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Interfor insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Interfor is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At Interfor Have Bought Stock Recently
Over the last quarter, Interfor insiders have spent a meaningful amount on shares. In total, insiders bought CA$183k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Insider Ownership
Many investors like to check how much of a company is owned by 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. From looking at our data, insiders own CA$7.0m worth of Interfor stock, about 0.9% of the company. We consider this fairly low insider ownership.
So What Do The Interfor Insider Transactions Indicate?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Interfor insiders are expecting a bright future. 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. While conducting our analysis, we found that Interfor has 1 warning sign and it would be unwise to ignore it.