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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Crest Nicholson Holdings plc (LON:CRST), that sends out a positive message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Crest Nicholson Holdings
The Last 12 Months Of Insider Transactions At Crest Nicholson Holdings
Over the last year, we can see that the biggest insider purchase was by CEO & Director Peter Truscott for UK£194k worth of shares, at about UK£2.28 per share. That implies that an insider found the current price of UK£2.33 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Crest Nicholson Holdings share holders is that insiders were buying at near the current price.
In the last twelve months Crest Nicholson Holdings insiders were buying shares, but not selling. Their average price was about UK£2.05. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share 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!
Crest Nicholson Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Crest Nicholson Holdings 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. 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 suggests Crest Nicholson Holdings insiders own 0.3% of the company, worth about UK£1.6m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Crest Nicholson Holdings Tell Us?
The fact that there have been no Crest Nicholson Holdings insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Crest Nicholson Holdings insiders are doubting the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 3 warning signs with Crest Nicholson Holdings and understanding these should be part of your investment process.