Should You Take Comfort From Insider Transactions At Sienna Senior Living Inc. (TSE:SIA)?
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Sienna Senior Living Inc. (TSE:SIA), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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 Sienna Senior Living
Sienna Senior Living Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Paula Coleman bought CA$499k worth of shares at a price of CA$13.19 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$10.46). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. We note that Paula Coleman was both the biggest buyer and the biggest seller.
Happily, we note that in the last year insiders paid CA$1.1m for 93.94k shares. But they sold 25800 shares for CA$489k. In the last twelve months there was more buying than selling by Sienna Senior Living insiders. You can see a visual depiction of insider transactions (by 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!
Sienna Senior Living 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.
Insiders at Sienna Senior Living Have Bought Stock Recently
Over the last quarter, Sienna Senior Living insiders have spent a meaningful amount on shares. Overall, four insiders shelled out CA$1.1m for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Sienna Senior Living insiders have about 0.9% of the stock, worth approximately CA$6.0m. We prefer to see high levels of insider ownership.
So What Does This Data Suggest About Sienna Senior Living Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Sienna Senior Living insiders are expecting a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 4 warning signs (2 are a bit concerning!) that you ought to be aware of before buying any shares in Sienna Senior Living.
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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at 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. Simply Wall St has no position in the stocks mentioned.
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