Insider transactions can often provide valuable insights for investors. If a high-ranking insider is buying company shares, it’s nearly always a positive event and investors should take note.
Here, we are going to highlight insider trades at Interfor Corp (IFP:CN). Interfor is one of the largest lumber producers globally. The company, which is based in Canada, harvests, manufactures, and sells lumber products, logs, and woodchips and has clients in North America, the Asia-Pacific and Europe. It’s traded on the Toronto Stock Exchange and currently has a market capitalization of CAD $1.85 billion
Interfor Corp: Insider Buying
Regulatory filings show that on 27 August, the President/CEO at Interfor, Ian Fillinger, bought 3,800 IFP shares at a price of CAD $26.41. This cost the insider around CAD $80,000 and increased his holding by just over 6%.
On the same day, the CFO, Richard Pozzebon, bought 8,990 IFP shares at an average price of CAD $26.27. These purchases cost Pozzebon about CAD $236,000.
High-level Insider Buying
The insider purchases at Interfor caught our eye as the two most senior employees within the company made the transactions. It is the CEO and CFO who ultimately shape the direction and budgets of a company and they have access to the most up-to-date information. When both insiders buy stock simultaneously, it sends out a strong positive signal to investors. Our Insider Model views this buying activity as bullish.
Interfor released record Q2 results at the start of August. The six months ended 30 June saw strong lumber prices, and an impressive operating performance helped Interfor produce financial results that included records for net earnings, adjusted EBITDA, and cash flow from operations.
For the period, net earnings of CAD $6.45 per share were up from CAD $4.01 per share in Q1. Adjusted EBITDA was CAD $611.3 million in the second quarter versus CAD $392.1 million in Q1. The strong performance allowed acquisitions to be made and capital to be returned to shareholders.
“Interfor’s strategy of maintaining a diversified portfolio of operations allows the Company to both reduce risk and maximize returns on invested capital over the business cycle. While uncertainty remains as to the duration and extent of the economic impact from the COVID-19 pandemic, Interfor is well positioned with its strong balance sheet and significant available liquidity,” said the company in its Q2 update.
On the back of record results at Interfor and a confident outlook statement, we see the recent insider buying as very positive. It would suggest that the top-level insiders believe the share price has further to run.