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Those following along with Citi Trends, Inc. (NASDAQ:CTRN) will no doubt be intrigued by the recent purchase of shares by Kenneth Seipel, Interim CEO & Director of the company, who spent a stonking US$5.4m on stock at an average price of US$19.03. That increased their holding by a full 766%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.
See our latest analysis for Citi Trends
The Last 12 Months Of Insider Transactions At Citi Trends
In fact, the recent purchase by Kenneth Seipel was the biggest purchase of Citi Trends shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of US$18.65. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Kenneth Seipel was the only individual insider to buy shares in the last twelve months.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Citi Trends is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Does Citi Trends Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Citi Trends insiders own about US$8.2m worth of shares (which is 5.3% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Citi Trends Tell Us?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Citi Trends stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for Citi Trends you should know about.