Don't Ignore The Insider Selling In Hammond Power Solutions
We wouldn't blame Hammond Power Solutions Inc. (TSE:HPS.A) shareholders if they were a little worried about the fact that William Hammond, the Chair of the Board recently netted about CA$3.8m selling shares at an average price of CA$276. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 3.2%.
Hammond Power Solutions Insider Transactions Over The Last Year
Notably, that recent sale by William Hammond is the biggest insider sale of Hammond Power Solutions shares that we've seen in the last year. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is CA$249. So it may not shed much light on insider confidence at current levels.
Over the last year, we can see that insiders have bought 2.10k shares worth CA$354k. But insiders sold 19.80k shares worth CA$5.7m. All up, insiders sold more shares in Hammond Power Solutions than they bought, over the last year. The average sell price was around CA$289. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of CA$249. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
See our latest analysis for Hammond Power Solutions
I will like Hammond Power Solutions better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Does Hammond Power Solutions Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Hammond Power Solutions insiders own 27% of the company, currently worth about CA$856m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Hammond Power Solutions Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at Hammond Power Solutions, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. In terms of investment risks, we've identified 2 warning signs with Hammond Power Solutions and understanding these should be part of your investment process.
Of course Hammond Power Solutions may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.