Investors who take an interest in North American Construction Group Ltd. (TSE: NOA) should definitely note that the Chairman of the Board, Martin Ferron, recently paid CA$13.52 per share to buy CA$162k worth of the stock. Although the purchase is not a big one, from either a percentage standpoint or absolute value, it can be seen as a good sign.
In fact, the recent purchase by Chairman of the Board Martin Ferron was not their only trade of North American Construction Group shares this year. They previously made a sale of -CA$340k worth of shares at a price of CA$21.04 per share. While insider selling is negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was well above the current price of CA$13.19. So it may not shed much light on insider confidence at current levels.
Martin Ferron bought a total of 89.00k shares over the year at an average price of CA$15.62. 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 date!
North American Construction Group 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.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. North American Construction Group insiders own about CA$38m worth of shares. That equates to 11% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
It’s certainly positive to see the recent insider purchase. We also take confidence from the longer-term picture of insider transactions. When combined with notable insider ownership, these factors suggest North American Construction Group 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. Be aware that North American Construction Group is showing 2 warning signs in our investment analysis, and 1 of those is a bit concerning…
Of course, North American Construction Group 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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