GreenPower Motor Company Inc (GPV:CN)
12-month performance: +500%
Insider activity: Bullish
Insider buying pattern: Multiple purchases from Chairman/CEO
Recent news: Good Q1 results
Research on insider transaction activity shows that insiders at small firms tend to earn significantly greater abnormal returns than insiders at large firms. Smaller companies are generally less researched than larger companies, meaning that they are often less efficiently priced.
In this report, we are going to highlight insider buying at a small Canadian company, GreenPower Motor Inc (GPV:CN). GreenPower Motor is a manufacturer of zero-emission electric-powered buses. It is listed on the Toronto Stock Exchange and currently has a market capitalization of CAD 241 million.
GreenPower Motor Co: insider buying
Our records show that GreenPower Motor’s Chairman and CEO Fraser Atkinson has made a number of large purchases of stock recently. Since the beginning of September, the insider has made four substantial purchases:
- 1 September: 25,000 shares at a price of CAD $20 per share
- 16 September: 5,000 shares at a price of CAD $17.63 per share
- 23 September: 10,000 shares at a price of CAD $14.80 per share
- 15 October: 5,000 shares at a price of CAD $15.01 per share
These purchases have cost the insider a total of CAD $811,200.
Source: 2iQ Research
High insider IQ
This insider activity is worth highlighting for a couple of reasons.
Firstly, as GreenPower Motor’s share price has climbed in recent months, the insider has increased the size of his purchases. The purchases above are all far larger than his purchases earlier in the year when the stock was trading at a much lower level. This buying at higher prices indicates that Atkinson believes the stock is still undervalued. Our Insider Model sees this buying activity as bullish.
Secondly, Atkinson has a high 2iQ insider IQ. His short-term IQ is 112 while his long-term IQ is 114. This tells us he has a good track record when it comes to timing his purchases well.
GreenPower Motor appears to have plenty of momentum at present. In the quarter ended 30 June 2020, the company:
- Received an order for an additional 100 EV Stars from Green Commuter
- Received an order for 10 all-electric B.E.A.S.T. school buses
- Commenced production of 10 B.E.A.S.T. school buses and 40 EV Stars
- Commenced trading on Nasdaq Capital Market under the symbol “GP”
In light of this momentum, we see the insider buying here as a bullish signal.