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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 Centrex Limited's (ASX:CXM) case, it's fantastic news for 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.
Check out our latest analysis for Centrex
Centrex Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Quentin Flannery for AU$200k worth of shares, at about AU$0.057 per share. That means that even when the share price was higher than AU$0.037 (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. 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.
While Centrex insiders bought shares during the last year, they didn't sell. 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!
Centrex is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Centrex Insiders Bought Stock Recently
We saw some Centrex insider buying shares in the last three months. Alternate Director Graham Chrisp shelled out AU$25k for shares in that time. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.
Does Centrex 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. Centrex insiders own about AU$12m worth of shares. That equates to 37% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Centrex Insider Transactions Indicate?
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. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Centrex and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Centrex. To that end, you should learn about the 3 warning signs we've spotted with Centrex (including 1 which is potentially serious).