With shares of embattled transportation manufacturer Bombardier, Inc. (TSX:BBD.B) now trading approximately 75% below its recent peak, and new announcements that the company has decided to completely spin off its stake in the A220 program (formerly the CSeries) and its rail division, investors now have to decide if the current stock price of the company accurately portrays the long-term potential of this business jet operator.
When shares of Bombardier were trading below $4 per share, a group of Bombardier executives announced a plan to sell a significant chunk of the stock they owned at the time, a huge red flag for me and something I’ve touched on in the past.
This was one of those rare examples of a clear message to investors and the market that shares were overpriced, and insiders wanted to cash in.
I also was of the mindset at the time that the market was displaying signs of exuberance with Bombardier, making this action by various insiders at Bombardier easier for me to spot as a clear time investors should have sold, or shorted, the stock.
As with any investment, make sure to consult a financial advisor before making any investment decisions, and do you research before investing your hard-earned money into any company.
Investors should never make an investment decision on insider trading activity alone, but rather should consider all fundamental long-term drivers of the business and its historical performance before making such decisions.
Insider buying or selling is not necessarily indicative of anything- insiders make such transactions all the time for purposes completely unrelated to the performance of the company.
Invest wisely, my friends.
Related Stories
