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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 Charles & Colvard, Ltd. (NASDAQ:CTHR), that sends out a positive message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Charles & Colvard
Charles & Colvard Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Director Ollin Sykes for US$78k worth of shares, at about US$0.36 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$0.31). Their view may have changed since then, but at least it shows they felt optimistic at the time. 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 Charles & Colvard insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At Charles & Colvard Have Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at Charles & Colvard. Insiders bought US$38k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Does Charles & Colvard Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Charles & Colvard insiders own 22% of the company, worth about US$2.0m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Charles & Colvard 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. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Charles & Colvard and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Charles & Colvard. To that end, you should learn about the 4 warning signs we've spotted with Charles & Colvard (including 3 which can't be ignored).