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Number Cruncher

Canadian stocks with strongest insider buying Add to ...

What are we looking for?

Strong buying of a company’s shares by the firm’s managers and directors has long been considered a good indication that a stock is ready to roar. After all, if the insiders who know a company best are buying its stock, then they must have confidence in what lies ahead. In keeping with that theory, we sought the Canadian stocks with the strongest insider buying over the past three months.

More Related to this Story

How we did it

Bloomberg has developed a screen that searches for companies with heavy buying by insiders. The screen examines companies with market capitalizations of $100-million or more and ranks them on the basis of four criteria:

  • amount of insider buying
  • total amount of management buying
  • insider buying as a percentage of the total trading volume
  • management buying as a percentage of the total trading volume

Bloomberg then calculates a score based on these four criteria. Stocks scoring 100 show the most insider and management buying over the past three months.

What we found

Our list shows the 20 Canadian stocks with the strongest insider buying over the past three months. Each of them has enough potential to entice managers and directors to put down their own cash for shares in the firm.

Investors should be aware, however, that buying stocks on the basis on insider buying is not a foolproof recipe for success. Bloomberg looked at how someone who bought the top 20 stocks in the United States and Canada based on the results of its insider-buying screen would have fared. Since 2002, such an investor would have lagged behind the S&P 500 by a wide margin.

“This 10-year backtest invalidates the theory that heavy insider buying is a determinant of outperformance,” Bloomberg says.

Fair enough, but insider buying remains a powerful indicator that a company’s best-placed observers are feeling bullish about its future. That suggests that investors who are willing to do additional research may find several gems on today’s list.

Follow on Twitter: @IanMcGugan

 

Insider buying screen for Canadian stocks

Company Ticker Market Cap
($-mil)
Score Insider Buys
(Past 3 Mos.)
Mgmt. Buys
(Past 3 Mos.)
Insider Buys
as a % of Volume
(Past 3 Mos.)
Mgmt. Buys
as a % of Volume
(Past 3 Mos.)
Ivanhoe Energy IE-T 247.8 100 3,447,492 3,447,492 14.9 14.9
Le Chateau Inc. A CTU.A-T 112.6 99.5 3,359,687 2,111,316 44.6 28.1
Absolute Software ABT-T 218.4 97 1,607,988 1,607,988 3.7 3.7
Genesis Land Dev. GDC-T 154.4 96.25 4,230,205 420,462 47.1 4.7
Amica Mature Life. ACC-T 287.9 95.5 776,739 776,739 5 5
Sprott Inc SII-T 666 92.5 491,268 491,268 3.5 3.5
DHX Media Ltd. DHX-T 191 90.75 567,181 386,394 2.8 1.9
Zargon Oil & Gas ZAR-T 232.2 90.75 512,304 512,304 1.6 1.6
Banro Corp. BAA-T 609.6 90.5 1,624,203 1,624,203 0.6 0.6
Uni-Select Inc. UNS-T 505 90.5 484,329 475,180 2.1 2
Storm Resources SRX-X 111.3 90.5 317,727 317,727 6 6
North Amer. Energy NOA-T 124.7 89.25 260,165 260,165 7.6 7.6
Western Copper WRN-T 143.5 88.75 261,875 261,875 4.8 4.8
FirstService FSV-T 850.3 87.75 897,028 897,028 0.6 0.6
Yoho Resources YO-X 146.1 87.5 299,415 299,415 2 2
Taseko Mines TKO-T 644.8 86.25 418,930 418,930 0.8 0.8
Total Energy Svc. TOT-T 459.1 85.75 333,699 333,699 1 1
Cequence Energy CQE-T 266.8 85.5 484,852 484,852 0.5 0.5
Eacom Timber ETR-X 134.1 82.5 179,671 179,671 1.8 1.8
Student Transport. STB-T 559.8 82.25 366,746 354,017 0.5 0.5

Source: Bloomberg

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  • IE-T
  • CTU.A-T
  • ABT-T
  • GDC-T
  • ACC-T
  • SII-T
  • DHX-T
  • ZAR-T
  • BAA-T
  • UNS-T
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Live Discussion of DHX on StockTwits
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Live Discussion of ZAR on StockTwits
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Live Discussion of BAA on StockTwits
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Live Discussion of UNS on StockTwits
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