We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Great Bear Resources Ltd. (CVE:GBR).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. 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.'
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The Last 12 Months Of Insider Transactions At Great Bear Resources
Over the last year, we can see that the biggest insider sale was by the President, Christopher Neil Taylor, for CA$221k worth of shares, at about CA$3.16 per share. That means that an insider was selling shares at around the current price of CA$2.90. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Christopher Neil Taylor was the only individual insider to sell over the last year.
In the last twelve months insiders purchased 218k shares for CA$308k. On the other hand they divested 78348 shares, for CA$221k. In the last twelve months there was more buying than selling by Great Bear Resources insiders. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Great Bear Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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 appears that Great Bear Resources insiders own 14% of the company, worth about CA$15m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Great Bear Resources Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Great Bear Resources shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Great Bear Resources insiders are doubting the company, and they do own shares. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Great Bear Resources.
But note: Great Bear Resources may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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