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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Western Pacific Trust Company (CVE:WP).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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.'
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Western Pacific Trust Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by David Mercier for CA$405k worth of shares, at about CA$0.10 per share. That means that even when the share price was below the current price of CA$0.10, an insider wanted to cash in some shares. While sellers have a variety of reasons for selling, this isn't particularly great to see. When an insider sells below the current price, it does tend to make us wonder about the current valuation. It is worth noting that this sale was 100% of David Mercier's holding. David Mercier was the only individual insider to sell over the last year.
You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Western Pacific Trust Insiders Are Selling The Stock
We've seen more direct insider selling than insider buying at Western Pacific Trust recently. We note David Mercier cashed in CA$405k worth of shares. On the other hand we note insiders bought CA$242k worth of shares. A further CA$143k of shares was purchased by Stormont Enterprises, a vehicle associated with director J. McKinney.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term.