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 Teck Resources Limited (TSE:TECK.B).
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, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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.
Teck Resources Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Senior Vice President of Corporate Development Andrew Golding bought CA$2.1m worth of shares at a price of CA$29.72 per share. That means that even when the share price was higher than CA$21.56 (the recent price), an insider wanted to purchase shares. 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. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders purchased 98760 shares for CA$2.8m. But insiders sold 2600 shares worth CA$82k. Overall, Teck Resources insiders were net buyers last year. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Teck Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Teck Resources Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Teck Resources. Not only was there no selling that we can see, but they collectively bought CA$161k worth of shares. This is a positive in our book as it implies some confidence.
Does Teck Resources Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Teck Resources insiders own about CA$19m worth of shares. That equates to 0.2% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Teck Resources Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Teck Resources we think they are probably pretty confident of a bright future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Teck 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.
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, but not derivative transactions.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.