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Investors who take an interest in Celanese Corporation (NYSE:CE) should definitely note that the Director, Scott Sutton, recently paid US$54.65 per share to buy US$407k worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 99%.
View our latest analysis for Celanese
Celanese Insider Transactions Over The Last Year
In fact, the recent purchase by Scott Sutton was the biggest purchase of Celanese shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than US$54.22 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Celanese insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around US$67.36. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insider Ownership Of Celanese
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. It appears that Celanese insiders own 0.5% of the company, worth about US$27m. 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 Celanese Insider Transactions Indicate?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Celanese shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Celanese. To help with this, we've discovered 2 warning signs (1 makes us a bit uncomfortable!) that you ought to be aware of before buying any shares in Celanese.