Bullish IM Cannabis Insider Buying Worth CA$2.0m Yet To Pay Off

Simply Wall St · 09/15/2023 11:18

The recent price decline of 12% in IM Cannabis Corp.'s (CSE:IMCC) stock may have disappointed insiders who bought CA$2.0m worth of shares at an average price of CA$2.48 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth CA$768k, which is not what they expected.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for IM Cannabis

The Last 12 Months Of Insider Transactions At IM Cannabis

In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Marc Lustig bought CA$826k worth of shares at a price of CA$1.68 per share. That means that even when the share price was higher than CA$0.95 (the recent price), an insider wanted to purchase shares. 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months IM Cannabis insiders were buying shares, but not selling. The average buy price was around CA$2.48. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
CNSX:IMCC Insider Trading Volume September 15th 2023

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of IM Cannabis

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that IM Cannabis insiders own 30% of the company, worth about CA$4.3m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At IM Cannabis Tell Us?

The fact that there have been no IM Cannabis insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think IM Cannabis insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 5 warning signs (3 are a bit unpleasant!) that you ought to be aware of before buying any shares in IM Cannabis.

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.