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It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Calix Limited's (ASX:CXL) case, it's fantastic news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Calix
The Last 12 Months Of Insider Transactions At Calix
The Co-Founder Mark Sceats made the biggest insider purchase in the last 12 months. That single transaction was for AU$439k worth of shares at a price of AU$4.39 each. That means that an insider was happy to buy shares at above the current price of AU$0.90. 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. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months Calix insiders were buying shares, but not selling. The average buy price was around AU$2.32. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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.
Does Calix 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. We usually like to see fairly high levels of insider ownership. Insiders own 20% of Calix shares, worth about AU$33m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Calix Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Calix shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Calix insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Calix. While conducting our analysis, we found that Calix has 1 warning sign and it would be unwise to ignore this.