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Last week, Cluey Ltd (ASX:CLU) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 24% last week, resulting in a AU$4.2m increase in the company's market worth, implying a 106% gain on their initial purchase. Put another way, the original AU$1.31m acquisition is now worth AU$2.70m.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Cluey
The Last 12 Months Of Insider Transactions At Cluey
In the last twelve months, the biggest single purchase by an insider was when Co-Founder & Non Executive Deputy Chairman Mark Rohald bought AU$1m worth of shares at a price of AU$0.03 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.062. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months Cluey insiders were buying shares, but not selling. 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.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 27% of Cluey shares, worth about AU$5.8m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Cluey Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders own shares in Cluey and we see no evidence to suggest they are worried about the future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we've found that Cluey has 4 warning signs (3 make us uncomfortable!) that deserve your attention before going any further with your analysis.