In This Article:
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Constellation Resources Limited (ASX:CR1), it sends a favourable 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Constellation Resources
Constellation Resources Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Kevin Johnson for AU$164k worth of shares, at about AU$0.16 per share. That means that an insider was happy to buy shares at above the current price of AU$0.15. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Constellation Resources insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$0.14. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Constellation Resources insiders own about AU$2.8m worth of shares. That equates to 30% 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 Does This Data Suggest About Constellation Resources Insiders?
The fact that there have been no Constellation Resources insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders own shares in Constellation Resources and we see no evidence to suggest they are worried about the future. 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. At Simply Wall St, we've found that Constellation Resources has 4 warning signs (3 are potentially serious!) that deserve your attention before going any further with your analysis.