Some of the losses incurred by insiders who purchased C$600,000 of Odd Burger Corporation (CVE:ODD) shares over the past year have recovered after the stock rose 12% over the past week. The purchase, however, proved to be a costly gamble, with losses currently totaling CA$30,000.
Although we would never suggest that investors base their decisions solely on what a company’s directors have done, logic dictates that you pay attention to whether insiders are buying or selling shares.
The last 12 months of insider trading at Odd Burger
In the past twelve months, the largest single insider purchase was when COO and Director Vasiliki McInnes purchased C$250,000 worth of stock at C$0.40 per share. Clearly, an insider wanted to buy, even at a price higher than the current stock price (i.e. C$0.38). Their perspective may have changed since then, but it at least shows that they were feeling optimistic at the time. For us, it is very important to consider the price that insiders pay for the shares. Generally, we are more positive about a stock if insiders bought the stock above current prices, as this suggests they viewed the stock as good value, even at a higher price.
Over the past year, we can see that insiders have purchased 1.50 million shares worth C$600,000. But insiders sold 10,000 shares worth C$7,000. Overall, Odd Burger insiders have been net buyers over the past year. The chart below shows insider trading (by companies and individuals) over the past year. If you want to know exactly who sold, how much and when, just click on the chart below!
There are many other companies whose insiders buy shares. You probably do not want to miss this free list of growing companies insiders are buying.
Does Odd Burger boast of high insider ownership?
Another way to test alignment between a company‘s executives and other shareholders is to look at how many shares they own. We generally like to see fairly high levels of insider ownership. It’s great to see that Odd Burger insiders own 55% of the company, which is worth around C$18 million. I like to see this level of insider ownership because it increases the chances that management is thinking about the best interests of shareholders.
So what does this data suggest about Odd Burger insiders?
The fact that there have been no Odd Burger insider trades recently certainly doesn’t bother us. On a more positive note, last year’s transactions are encouraging. With strong insider ownership and encouraging transactions, it appears that Odd Burger insiders believe the company has some merit. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. At Simply Wall St, we discovered that Odd Burger has 4 warning signs (1 is significant!) which deserve your attention before going further in your analysis.
But note: Odd Burger may not be the best stock to buy. So take a look at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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