It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in CSR Limited (ASX:CSR).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
See our latest analysis for CSR
CSR Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Chairman John Gillam bought AU$498k worth of shares at a price of AU$2.71 per share. We do like to see buying, but this purchase was made at well below the current price of AU$4.27. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months CSR insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
CSR is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Have CSR Insiders Traded Recently?
We've only seen a tiny insider purchase valued at AU$1.7k, in the last three months. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.
Does CSR Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that CSR insiders own about AU$14m worth of shares (which is 0.7% of the company). Whilst better than nothing, we're not overly impressed by these holdings.