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Canadian Utilities Insiders Placed Bullish Bets Worth CA$816.6k

Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Canadian Utilities Limited (TSE:CU), it sends a favourable message to the company's shareholders.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Canadian Utilities

Canadian Utilities Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director Robert J. Hanf bought CA$611k worth of shares at a price of CA$32.16 per share. That means that even when the share price was higher than CA$30.17 (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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

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Happily, we note that in the last year insiders paid CA$817k for 24.40k shares. On the other hand they divested 6.00 shares, for CA$224. In the last twelve months there was more buying than selling by Canadian Utilities insiders. 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!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

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. It appears that Canadian Utilities insiders own 0.2% of the company, worth about CA$19m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Canadian Utilities Tell Us?

It doesn't really mean much that no insider has traded Canadian Utilities shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Canadian Utilities and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Canadian Utilities you should be aware of, and 1 of these is a bit unpleasant.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.