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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 Checkit plc (LON:CKT), that sends out a positive message to the company's shareholders.
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.
See our latest analysis for Checkit
Checkit Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Chairman Keith Daley bought UK£48k worth of shares at a price of UK£0.19 per share. We do like to see buying, but this purchase was made at well below the current price of UK£0.21. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Checkit insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Checkit is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insiders At Checkit Have Bought Stock Recently
We saw some Checkit insider buying shares in the last three months. Non-Executive Chairman Keith Daley shelled out UK£28k for shares in that time. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
Insider Ownership Of Checkit
For a common shareholder, it is worth checking how many shares are held by company 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 24% of Checkit shares, worth about UK£5.6m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Checkit Tell Us?
Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Checkit and their transactions don't cause us concern. 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. In terms of investment risks, we've identified 2 warning signs with Checkit and understanding these should be part of your investment process.