Any time a company’s core shareholders or management team begins trimming (or dumping) positions in their own company’s stock, investors tend to take notice. While divesting of shares can take place for a variety of different reasons (selling stock options, liquidating a position for personal reasons, etc.), in general when insiders offload shares, investors take a look at whether such a sale may represent a signal to the market that shares in said company may be approaching a peak rather than a trough.
This past week, Bombardier, Inc. (TSX:BBD.B) Vice President of Corporate Strategy Silvain Levesque sold 50,000 shares at above the $3 level. Given the fact that Bombardier shares have rebounded significantly from a 52-week low of below $1.90, cashing in at nearly double the trough may be considered a smart move, should Bombardier’s share price plateau or drop off from here.
With a number of positive catalysts taking Bombardier’s share price higher in recent months, including a number of strategic moves to counter a dispute with American rival Boeing Co. (NYSE:BA) over unfair subsidies purported to be received by Bombardier’s management team, questions have begun to arise as to how high Bombardier’s shares can go before investors begin to sound the alarm on valuation.
At above the $3 level, as indicated by recent transactions within Bombardier’s own management team, it may be time to cash out.
Invest wisely, my friends.
