TFI International's Insider Buying: A Signal of Undervaluation and Strategic Confidence

In the volatile landscape of transportation and logistics, TFI International (TSX: TFII) has drawn attention for its insider buying activity, which appears to signal both undervaluation and strategic confidence. Over the past 12 months, insiders have purchased C$13.68 million worth of shares, with directors like Leslie Abi-Karam and Debra Kelly-Ennis acquiring stock at prices ranging from $87.64 to $89.99 per share in early August 2025 [1]. These purchases, occurring amid a broader $226.6 million share buyback program, suggest that management views the stock as attractively priced [2].

Academic research underscores the significance of such insider activity. Studies show that insider buying often outperforms the market by 6% to 10.2% annually, with abnormal returns materializing within days of the trade [3]. This is attributed to insiders’ access to non-public information about a company’s fundamentals. For TFI, the timing of purchases—such as Abi-Karam’s $137,966 investment on August 1—aligns with periods of subdued stock prices, reinforcing the idea that insiders are capitalizing on undervaluation [4].

Valuation metrics further support this narrative. TFI’s trailing P/E ratio of 21.85 is below the industry median of 26.3, indicating a relatively modest valuation [5]. Despite a 3.57% post-earnings dip to $93.58 in late August, the stock remains within a range where insiders have actively accumulated shares [6]. Analysts project a 32% earnings growth over the next few years, yet the stock trades at a discount to peers, suggesting market skepticism about near-term challenges like freight demand volatility [7].

However, the interplay between insider buying and market sentiment is nuanced. While insiders may be leveraging public signals—such as declining investor attention—to time their purchases [8], the broader market has shown mixed reactions. For instance, TFI’s stock surged to $122.53 on August 12 but later retreated to $94.81 by month-end, reflecting uncertainty about macroeconomic headwinds [9]. This volatility highlights the tension between management’s confidence and external pressures, such as tariff uncertainties and competitive dynamics in the logistics sector [10].

Despite these challenges, TFI’s insider activity and valuation metrics present a compelling case for investors. The company’s free cash flow of $182 million in Q2 2025 supports continued buybacks and dividends, while insider purchases at sub-$90 prices indicate alignment with long-term value creation [11]. Academic insights suggest that such transactions can correct mispricing over time, particularly for undervalued stocks [12].

Source:
[1] TFI International (TFII) Insider Trading Activity 2025, [https://www.marketbeat.com/stocks/TSE/TFII/insider-trades/]
[2] TFI International Inc. (TFII.TO) Recent Insider Transactions, [https://finance.yahoo.com/quote/TFII.TO/insider-transactions/]
[3] Insider Trading Academic Research, [https://www.insidearbitrage.com/academic-research-related-to-insider-trading/]
[4] Public market insider buying at TFI International (TFII), [https://www.theglobeandmail.com/investing/markets/stocks/TFII-T/pressreleases/33879963/public-market-insider-buying-at-tfi-international-tfii/]
[5] TFI International (TFII) Statistics & Valuation, [https://stockanalysis.com/stocks/tfii/statistics/]
[6] Earnings call transcript: TFI International Q2 2025 shows EPS beat, [https://www.investing.com/news/transcripts/earnings-call-transcript-tfi-international-q2-2025-shows-eps-beat-amid-revenue-dip-93CH-4156250]
[7] TFI International Inc. Just Beat Earnings Expectations, [https://finance.yahoo.com/news/tfi-international-inc-just-beat-103825873.html]
[8] New Virginia Tech study reveals how company insiders..., [https://news.vt.edu/articles/2025/05/pamplin-investor-attention-insider-trading.html]
[9] TFI International (TSE:TFII) Stock Price Up 5.2% - Here's Why, [https://www.marketbeat.com/instant-alerts/tfi-international-tsetfii-stock-price-up-52-heres-why-2025-08-12/]
[10] Earnings call transcript: TFI International Q2 2025 shows EPS beat, [https://www.investing.com/news/transcripts/earnings-call-transcript-tfi-international-q2-2025-shows-eps-beat-amid-revenue-dip-93CH-4156250]
[11] How Investors Are Reacting To TFI International (TSX:TFII), [https://simplywall.st/stocks/ca/transportation/tsx-tfii/tfi-international-shares/news/how-investors-are-reacting-to-tfi-international-tsxtfii-insi]
[12] Does Insider Trading Correct Mispricing?, [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5127729]