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Have Insiders Been Buying Sharc International Systems Inc. (CSE:SHRC) Shares This Year?

Simply Wall St
·4-min read

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Sharc International Systems Inc. (CSE:SHRC), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Sharc International Systems

The Last 12 Months Of Insider Transactions At Sharc International Systems

Over the last year, we can see that the biggest insider purchase was by Nominee Director Daryle Anderson for CA$255k worth of shares, at about CA$0.065 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$0.17), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Sharc International Systems insiders may have bought shares in the last year, but they didn't sell any. 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!

CNSX:SHRC Recent Insider Trading May 25th 2020
CNSX:SHRC Recent Insider Trading May 25th 2020

Sharc International Systems 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.

Insider Ownership of Sharc International Systems

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Sharc International Systems insiders own 25% of the company, worth about CA$2.1m. 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 Sharc International Systems Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Sharc International Systems shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Sharc International Systems and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 5 warning signs for Sharc International Systems (2 shouldn't be ignored) you should be aware of.

But note: Sharc International Systems 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.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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. 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. Thank you for reading.