Replies to post #1542 on 1933 Industries Inc. (TGIFF)

[JohnCM]

Read This Before Selling 1933 Industries Inc.

Simply Wall Street
February 21, 2020

We often see insiders buying up shares in companies that perform well over the long term. The 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 1933 Industries Inc. (CSE:TGIF).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

The Last 12 Months Of Insider Transactions At 1933 Industries

There wasn't any very large single transaction over the last year, but we can still observe some trading.

In the last twelve months 1933 Industries insiders were buying shares, but not selling. They paid about CA$0.27 on average. This is nice to see since it implies that insiders might see value around current prices (around CA$0.18). The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

1933 Industries Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at 1933 Industries. Insiders shelled out CA$56k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Does 1933 Industries Boast High Insider Ownership?

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 5.6% of 1933 Industries shares, worth about CA$3.0m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The 1933 Industries Insider Transactions Indicate?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on 1933 Industries stock