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Looking at Roots Corporation's (TSE:ROOT ) insider transactions over the last year, we can see that insiders were net buyers. That is, there were more number of shares purchased by insiders than there were sold.
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 Roots
The Last 12 Months Of Insider Transactions At Roots
In fact, the recent purchase by insider Edward Kernaghan was not their only acquisition of Roots shares this year. Earlier in the year, they paid CA$2.56 per share in a CA$224k purchase. So it's clear an insider wanted to buy, at around the current price, which is CA$2.75. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Roots insider decided to buy shares at close to current prices. Edward Kernaghan was the only individual insider to buy shares in the last twelve months.
Edward Kernaghan bought a total of 109.00k shares over the year at an average price of CA$2.50. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
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. Our data indicates that Roots insiders own about CA$11m worth of shares (which is 11% of the company). We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Roots Insiders?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Roots we think they are probably pretty confident of a bright future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 2 warning signs with Roots and understanding these should be part of your investment process.