Note from Dudley Pierce Baker
I have maintained a subscription to INKResearch.com for many years allowing me to track insider trading in Canada and the U.S. markets. This is a general market comment from INK and I thought worthy of sharing with you.
Yesterday, we highlighted insider selling at Canadian National Railway (Cloudy; CNR) and said that it did not give us any comfort regarding the potential for railway stocks to avoid getting hit by economic slowdown fears. Today, we visit Canadian Pacific Railway where CEO activity gives us the outright chills about the outlook for the stock.
On October 17th, Canadian Pacific Railway (CP) announced its intention to launch a share repurchase program. In the accompanying press release, CEO Keith Creel said, “With the new share repurchase program, we are renewing our commitment to return cash to shareholders in a disciplined, opportunistic manner”. The TSX accepted the company’s notice for the buyback program two days later. In the following month, Mr. Creel sold $16.5 million in company shares after exercising options.
Generally, we have a hard time with the idea that it is in the best interest of shareholders to use cash to buyback shares when the stock is soaring near all-time highs and debt lingers on the balance sheet. When such buybacks are accompanied by insider selling, we view it as a negative sign. When one of those insiders selling is also a board member, it is a bigger negative. This is the type of behavior and attitudes we tend to see in frothy and toppy environments. Sometimes those tops take a long time to form. In this case, we will stick our necks out and suggest the top for CP stock is probably in for a long time.
| Buys (000’s) | Sells (000’s) | |
| SEDI Market Volume (Last 10 Days) | 2,000 | 0 |
| Quoted Market Value | $34,649,478,339 |
| Insider Holdings | $13,602,580 |
| Holdings % of QMV | 0.04% |
| Number of TSX Companies with Sell/Buy Filings |
| Number of Venture Companies with Marker Trades |
| Last Trading Day’s TSX Most Active (January 2, 2019) | ||||
| Issuer Name | Symbol | Trading Volume (000’s) |
Insiders | |
| 90-Day Executive Bias |
||||
| Barrick Gold | ABX | 46,929 | Buying | |
| Aurora Cannabis | ACB | 9,813 | Selling | |
| Bombardier | BBD.B | 8,877 | N/A | |
| Aphria | APHA | 8,225 | Buying | |
| ProMetic Life Sciences | PLI | 6,808 | Buying | |
| Baytex Energy | BTE | 5,579 | Buying | |
| Encana | ECA | 5,546 | Buying | |
| Kinross Gold | K | 5,178 | N/A | |
| Manulife Financial | MFC | 4,945 | Buying | |
| Enbridge | ENB | 4,442 | Buying | |
| Last Trading Day’s Venture Most Active (January 2, 2019) | ||||
| Issuer Name | Symbol | Trading Volume (000’s) |
Insiders | |
| 90-Day Executive Bias |
||||
| Namaste Technologies | N | 7,891 | Selling | |
| Kalytera Therapeutics | KALY | 4,284 | N/A | |
| Auxly Cannabis Group | XLY | 2,948 | N/A | |
| Sokoman Iron | SIC | 2,437 | Buying | |
| CUV Ventures | CUV | 2,050 | N/A | |
| Rio2 | RIO | 1,901 | Buying | |
| OrganiGram Holdings | OGI | 1,746 | Buying | |
| HIVE Blockchain Tech | HIVE | 1,733 | N/A | |
| Adamera Minerals | ADZ | 1,724 | Selling | |
| CardioComm Solutions | EKG | 1,481 | Buying | |
| Last Trading Day’s TSX Price Gainers (January 2, 2019) | ||||
| Issuer Name | Symbol | D/D Gain | Insiders | |
| 90-Day Executive Bias |
||||
| E-L Financial | ELF | $16.94 | Buying | |
| Canadian Tire | CTC | $11.90 | Buying | |
| Fairfax Financial Holding | FFH | $3.06 | Buying | |
| Canopy Growth | WEED | $2.67 | Buying | |
| Bausch Health Companies | BHC | $2.22 | Selling | |
| goeasy | GSY | $2.16 | Buying | |
| Senvest Capital | SEC | $1.99 | N/A | |
| Methanex | MX | $1.98 | N/A | |
| TransCanada | TRP | $1.66 | Selling | |
| Equitable Group | EQB | $1.65 | N/A | |
| Last Trading Day’s Venture Price Gainers (January 2, 2019) | ||||
| Issuer Name | Symbol | D/D Gain | Insiders | |
| 90-Day Executive Bias |
||||
| Shaw Communications | SJR.A | $2.70 | Selling | |
| OrganiGram Holdings | OGI | $0.83 | Buying | |
| Cobalt 27 Capital | KBLT | $0.50 | Buying | |
| Galaxy Digital Holdings | GLXY | $0.40 | Buying | |
| Abitibi Royalties | RZZ | $0.32 | Buying | |
| Emerald Health Therapeuti | EMH | $0.27 | N/A | |
| Namaste Technologies | N | $0.24 | Selling | |
| Questor Technology | QST | $0.24 | Buying | |
| DiaMedica Therapeutics | DMA | $0.20 | N/A | |
| Millennial Lithium | ML | $0.20 | Buying | |
| Last Trading Day’s TSX Price Losers (January 2, 2019) | ||||
| Issuer Name | Symbol | D/D Loss | Insiders | |
| 90-Day Executive Bias |
||||
| Constellation Software | CSU | 23.15 | Selling | |
| Boyd Group Income Fund | BYD.UN | 3.05 | Selling | |
| Morguard | MRC | 3.01 | N/A | |
| FirstService | FSV | 2.57 | Selling | |
| Restaurant Brands Intl LP | QSP.UN | 2.23 | N/A | |
| Shopify | SHOP | 1.68 | Selling | |
| Restaurant Brands Intl | QSR | 1.56 | Buying | |
| Linamar | LNR | 1.44 | Buying | |
| Nutrien | NTR | 1.34 | Buying | |
| Thomson Reuters | TRI | 1.33 | Selling | |
| Last Trading Day’s Venture Price Losers (January 2, 2019) | ||||
| Issuer Name | Symbol | D/D Loss | Insiders | |
| 90-Day Executive Bias |
||||
| XPEL | DAP.U | 0.30 | N/A | |
| People Corp | PEO | 0.29 | Selling | |
| Frankly | TLK | 0.25 | N/A | |
| Jemtec | JTC | 0.19 | N/A | |
| SilverCrest Metals | SIL | 0.18 | Buying | |
| Candelaria Mining | CAND | 0.14 | N/A | |
| Probe Metals | PRB | 0.10 | Buying | |
| Novo Resources | NVO | 0.10 | N/A | |
| Pacific Booker Minerals | BKM | 0.10 | Selling | |
| Eastwood Bio-Medical Ca | EBM | 0.10 | N/A | |
| Last Trading Day’s TSX Percentage Gainers (January 2, 2019) | ||||
| Issuer Name | Symbol | D/D %Gain | Insiders | |
| 90-Day Executive Bias |
||||
| First Mining Gold | FF | 42.86% | Buying | |
| ProMetic Life Sciences | PLI | 37.25% | Buying | |
| Granite Oil | GXO | 23.64% | Buying | |
| Profound Medical | PRN | 21.82% | Buying | |
| Faircourt Split Trust | FCS.UN | 21.53% | N/A | |
| Real Matters | REAL | 20.00% | N/A | |
| Fortune Minerals | FT | 20.00% | Buying | |
| Obsidian Energy | OBE | 17.65% | Buying | |
| TriMetals Mining | TMI.B | 15.38% | N/A | |
| Aptose Biosciences | APS | 15.38% | Buying | |
| Last Trading Day’s Venture Percentage Gainers (January 2, 2019) | ||||
| Issuer Name | Symbol | D/D %Gain | Insiders | |
| 90-Day Executive Bias |
||||
| Mazarin | MAZ.H | 69.23% | N/A | |
| DeepMarkit | MKT | 50.00% | N/A | |
| Volcanic Gold Mines | VG | 50.00% | Buying | |
| Galaxy Digital Holdings | GLXY | 40.00% | Buying | |
| Aftermath Silver | AAG.H | 38.46% | N/A | |
| Mammoth Resources | MTH | 33.33% | N/A | |
| AurCrest Gold | AGO | 33.33% | Selling | |
| Nortec Minerals | NVT | 33.33% | N/A | |
| Stans Energy | HRE | 33.33% | Buying | |
| Pure Energy Minerals | PE | 33.33% | N/A | |
| Last Trading Day’s TSX Percentage Losers (January 2, 2019) | ||||
| Issuer Name | Symbol | D/D %Loss | Insiders | |
| 90-Day Executive Bias |
||||
| Aberdeen International | AAB | -16.67% | N/A | |
| exactEarth | XCT | -13.46% | N/A | |
| DXI Energy | DXI | -12.50% | N/A | |
| SOPerior Fertilizer | SOP | -12.50% | Buying | |
| Xtra-Gold Resources | XTG | -10.47% | N/A | |
| Brompton Oil Split | OSP | -10.46% | Buying | |
| ENTREC | ENT | -9.68% | Buying | |
| Posera | PAY | -9.52% | N/A | |
| Scandium Int’l Mining | SCY | -9.52% | N/A | |
| Dundee | DC.A | -9.38% | N/A | |
| Last Trading Day’s Venture Percentage Losers (January 2, 2019) | ||||
| Issuer Name | Symbol | D/D %Loss | Insiders | |
| 90-Day Executive Bias |
||||
| True North Gems | TGX | -60.00% | N/A | |
| TVI Pacific | TVI | -50.00% | N/A | |
| Waterfront Capital | WFG.H | -33.33% | N/A | |
| Quinto Resources | QIT | -28.57% | N/A | |
| Volt Energy | VOLT | -28.57% | N/A | |
| Strategic Oil & Gas | SOG | -25.00% | N/A | |
| Candelaria Mining | CAND | -23.73% | N/A | |
| High Mountain Capital | BUZD.P | -23.53% | N/A | |
| BTU Metals | BTU | -21.74% | Buying | |
| Toachi Mining | TIM | -21.05% | N/A | |
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On November 8th, Canadian Pacific Railways (CP) CEO Keith Creel exercised 60,000 Options at an exercise price of $115.78 and sold the same number of Common Shares in the public market at an average price of $275.23. The CEO currently holds 88 Common Shares on a direct holdings basis, and 2,322 Common Shares on an indirect holdings basis.
Also on November 8th, the company repurchased 40,000 Common Shares at $275.01. Since October 19th, Canadian Pacific Railway has reported repurchasing 1,222,200 Common Shares at an average price of $268.12.
The stock currently holds a cloudy INK Edge outlook on the equally weighted V.I.P. criteria of valuations, insider commitment and price momentum which places it in the bottom 30% of all stocks ranked. INK outlook categories are designed to identify groups of stocks that have the potential to out- or under-perform the market. However, any individual stock could surprise on the up or downside. As such, outlook categories are not meant to be stock-specific recommendations.