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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Western Pacific Trust Company (CVE:WP).

Do Insider Transactions Matter?

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 would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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.'

Check out our latest analysis for Western Pacific Trust

Western Pacific Trust Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by David Mercier for CA$405k worth of shares, at about CA$0.10 per share. That means that even when the share price was below the current price of CA$0.10, an insider wanted to cash in some shares. While sellers have a variety of reasons for selling, this isn't particularly great to see. When an insider sells below the current price, it does tend to make us wonder about the current valuation. It is worth noting that this sale was 100% of David Mercier's holding. David Mercier was the only individual insider to sell over the last year.

You can see the insider transactions (by 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Western Pacific Trust Insiders Are Selling The Stock

We've seen more direct insider selling than insider buying at Western Pacific Trust recently. We note David Mercier cashed in CA$405k worth of shares. On the other hand we note insiders bought CA$242k worth of shares. A further CA$143k of shares was purchased by Stormont Enterprises, a vehicle associated with director J. McKinney.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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.

Western Pacific Trust insiders own about CA$823k worth of shares (which is 47% 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.

What Might The Insider Transactions At Western Pacific Trust Tell Us?

Overall, we wouldn't draw any strong conclusions from recent transactions, even though it is good to see high insider ownership. It is good to see high insider ownership, but the insider selling leaves us cautious.

To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.