Another Reason Why Now May Not Be the Time to Buy BRP Inc.

Any time several insiders within the same firm liquidate positions at the same time, investors begin to take notice. In this article, I’m going to take a look at one such firm: BRP, Inc. (TSX:DOO).

BRP is a former subsidiary of Bombardier, Inc. (TSX:BBD.B) which was spun off in 2003 and subsequently went public a decade later. Since the IPO, the four-year return for this stock is approximately 56%, representing a compounded annual return (CAGR) of nearly 12% - not too shabby for any investor.

With such impressive growth underpinned by strong performance in its power sports vehicles and improved discretionary spending, it appears that insiders within BRP believe the party may actually be coming to an end, and now may be the time to take some money off the table.

After all, consumer discretionary tends to be one of the industries that gets hit the hardest in down economies, and the most recent bull market which is in its 10th year (one of the longest in history) has many investors and analysts considering the fact that "letting it ride" may not be the best long-term strategy for equity positions in firms such as BRP.

Over the course of the past two weeks, board member Edward Philip, SVP Anne Le Breton, and Director Michael Hanley all sold shares (40,000 shares, 5,000 shares, and 14,862 shares respectively), reducing portfolio balances to very small holdings.

The combined sale of nearly 60,000 shares of BRP stock amounts to approximately 0.05% of the total float, a relatively insignificant amount, only significant perhaps in the sense that all three insiders sold shares during a very similar window.

Invest wisely, my friends.