The recent 10.0% drop in Vanadian Energy Corp.'s (CVE:VEC.H) stock could come as a blow to insiders who purchased CA$783.8k worth of stock at an average buy price of CA$0.16 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth CA$440.9k which is not ideal.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Vanadian Energy Insider Transactions Over The Last Year
The Independent Chairman of the Board Clive Johnson made the biggest insider purchase in the last 12 months. That single transaction was for CA$535k worth of shares at a price of CA$0.16 each. That means that an insider was happy to buy shares at above the current price of CA$0.09. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Over the last year, we can see that insiders have bought 4.90m shares worth CA$784k. On the other hand they divested 465.25k shares, for CA$48k. Overall, Vanadian Energy insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
See our latest analysis for Vanadian Energy
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insiders At Vanadian Energy Have Sold Stock Recently
Over the last three months, we've seen a bit of insider selling at Vanadian Energy. Independent Director Gordon Keep sold just CA$48k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.
Does Vanadian Energy Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Vanadian Energy insiders own 44% of the company, currently worth about CA$497k based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Vanadian Energy Tell Us?
While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Vanadian Energy insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the 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. You'd be interested to know, that we found 6 warning signs for Vanadian Energy and we suggest you have a look.
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.
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