In late May, long-term care facility operator Extendicare (TSX:EXE) received a major vote of confidence in the form of a major investment by Canadian private equity group, Sandpiper, which raised its stake in the embattled company to more than 10%.
This investment is one of many such transactions by private equity groups across a number of beaten up sectors that appeared to be offering significant value at current levels, and investors ought to expect such transactions to continue for some time to come.
While private equity investments or those from other institutional investors such as pension funds are not necessarily insider transactions, in many cases institutional investors like Sandpiper will have board seats or other means of influencing companies like Extendicare, so I view these transactions in a similar light.
A large bet by a fund like Sandpiper whose sole purpose is generating returns from undervalued companies is definitely something retail investors ought to pay attention to.
As always, please remember to consult with a certified financial advisor and do your own homework before making investing decisions. Insider buying and selling activity is not necessarily indicative of the future performance of a given company’s stock price, and insiders regularly buy or sell positions in companies they own or manage for reasons other than expectations of future stock price performance.
Analyzing insider transactions in a given stock is one tool of many to glean pertinent information to assist in investment decision making.
Invest wisely, my friends.
