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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 City Chic Collective Limited's (ASX:CCX) case, it's fantastic news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for City Chic Collective
The Last 12 Months Of Insider Transactions At City Chic Collective
The Independent Non-Executive Chairman Michael Graham Kay made the biggest insider purchase in the last 12 months. That single transaction was for AU$90k worth of shares at a price of AU$0.36 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.33). 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. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While City Chic Collective insiders bought shares during the last year, they didn't sell. 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!
City Chic Collective is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership Of City Chic Collective
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. From our data, it seems that City Chic Collective insiders own 12% of the company, worth about AU$9.4m. However, it's possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About City Chic Collective Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. 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 City Chic Collective insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for City Chic Collective that deserve your attention before buying any shares.