Those following along with ATCO Ltd. (TSE:ACO.X) will no doubt be intrigued by the recent purchase of shares by Nancy Southern, Chair & CEO of the company, who spent a stonking CA$692k on stock at an average price of CA$46.10. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 2.4%.
The Last 12 Months Of Insider Transactions At ATCO
In fact, the recent purchase by Chair & CEO Nancy Southern was not their only acquisition of ATCO shares this year. Earlier in the year, they paid CA$45.21 per share in a CA$1.4m purchase. So it's clear an insider wanted to buy, at around the current price, which is CA$47.58. 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. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the ATCO insiders decided to buy shares at close to current prices.
In the last twelve months insiders purchased 462.70k shares for CA$20m. But insiders sold 7.40k shares worth CA$333k. In the last twelve months there was more buying than selling by ATCO insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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).
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 1.2% of ATCO shares, worth about CA$66m. 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 ATCO Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest ATCO insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that ATCO has 2 warning signs and it would be unwise to ignore these.
Of course ATCO may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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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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.
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