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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Home Capital Group Inc. (TSE:HCG).
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 in the company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
See our latest analysis for Home Capital Group
The Last 12 Months Of Insider Transactions At Home Capital Group
Over the last year, we can see that the biggest insider purchase was by insider James Pelletier for CA$106k worth of shares, at about CA$28.32 per share. We do like to see buying, but this purchase was made at well below the current price of CA$36.50. 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.
In the last twelve months insiders purchased 9.75k shares for CA$267k. But insiders sold 3.65k shares worth CA$115k. In total, Home Capital Group insiders bought more than they sold over the last year. 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!
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).
Home Capital Group Insiders Are Selling The Stock
Over the last three months, we've seen a bit of insider selling at Home Capital Group. Senior VP John Hong only netted CA$59k selling shares, in that period. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Home Capital Group insiders own 8.0% of the company, worth about CA$148m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.