We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Theto my derelict favorite 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 shareholders might well want to know whether insiders have been buying or selling shares in

MTY Food Group Inc.

(

TSE:MTY

).

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, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University

study

found that ‘insider purchases earn abnormal returns of more than 6% per year.’

View our latest analysis for MTY Food Group

The Last 12 Months Of Insider Transactions At MTY Food Group

In the last twelve months, the biggest single sale by an insider was when Independent Director Dickie Orr sold CA$426k worth of shares at a price of CA$71.23 per share. That means that an insider was selling shares at around the current price of CA$61.73. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price. Dickie Orr was the only individual insider to sell shares in the last twelve months.

You can see the insider transactions over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

TSX:MTY Insider Trading January 2nd 19

I will like MTY Food Group better if I see some big insider buys. While we wait, check out this

free

list of growing companies with considerable, recent, insider buying.

Insider Ownership

Many investors like to check how much of a company is owned by 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. It’s great to see that MTY Food Group insiders own 22% of the company, worth about CA$347m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About MTY Food Group Insiders?

An insider hasn’t bought MTY Food Group stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn’t bring confidence, either. But since MTY Food Group is profitable and growing, we’re not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. 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

.

Story continues

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at

[email protected]

.

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