INK Ultra Money: How do insiders react to bad news?

By Ted Dixon / November 30, 2019 / / Article Link

When bad news hits, it is a good idea to see if insiders are buying or selling. In this morning report, INK Research takes a look at insider activity after Badger Daylighting (BAD) shares fell following a Q3 earnings disappointment. Watch the YouTube version of this short video which was first published for Ultra Money members on November 19, 2019.

Was a bad Q3 followed by a good insider reaction?

Badger has initially moved higher since we released the video and it is the beginning of the week and has climbed its way back to be one of the better performing members of the INK Canadian Insider Index since the fall semi-annual rebalancing. Don't miss another INK Ultra Money stock highlight. Join the Canadian Insider Club as an Ultra member today - use discount coupon BLACKBOX until December 31, 2019 to get $99 off a new CIN Club Ultra membership!

Video script:

Badger Daylighting providesspecialized excavation services acrossa broad range of infrastructurerelated industries in North America including oil & gas.Badger has had some bad news recently.The stock plunged almost 22% onNovember 6th after announcing Q3 results.While both revenue and net earnings wereup compared to Q3 2018,adjusted EBITDA margin was 27.3%,down from 30.2% in the comparable period.Those falling margins along withthe firm's reduced 2019 guidancefor adjusted EBITDA from a mid point of$180 million to $162.5million likely ledsome investors to dump the stock.Seeing how insiders react tobad news is a key benefit of insider reports.We don't want to see insidersselling on bad news as itraises the question whethermore bad news is on the way.Ideally, we want to see insiders buying asthat suggests the marketreaction may be overdone.This is what we have seen atBadger with insiders spending about$1.2 million picking up sharesin the public market sinceQ3 results were announced.It is also worth noting thatthe short-selling position inBadger remains at an elevated level,and our signals suggest the setup ofa potential short-squeeze situation.Overall, Badger hasa mostly sunny INK Edge outlook,placing it in the top30% of all stocks ranked.Our report which is nota recommendation to buy or sell securitiesis available through INKResearch.comor the Canadian Insider Club.Good luck, friends, and thanks for listening!

As a reminder, INK Research does not accept payments from issuers or their promoters for stock coverage.

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