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From what we can see, insiders were net buyers in Cogstate Limited's (ASX:CGS ) during the past 12 months. That is, insiders acquired the stock in greater numbers than they sold it.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Cogstate
Cogstate Insider Transactions Over The Last Year
The Non-Executive Chairman Martyn Myer made the biggest insider purchase in the last 12 months. That single transaction was for AU$108k worth of shares at a price of AU$1.08 each. That means that an insider was happy to buy shares at above the current price of AU$0.90. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Martyn Myer.
The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Cogstate Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Cogstate insiders own 37% of the company, worth about AU$57m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Cogstate Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Cogstate insiders are well aligned, and that they may think the share price is too low. Of course, the future is what matters most. So if you are interested in Cogstate, you should check out this free report on analyst forecasts for the company.
Of course Cogstate may not be the best stock to buy. So you may wish to see this free collection of high quality companies.