Chegg, Inc. (NYSE:CHGG) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 12% resulting in a US$494m addition to the company’s market value. As a result, their original purchase of US$2.3m worth of stock is now worth US$2.7m.

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.

View our latest analysis for Chegg

The Last 12 Months Of Insider Transactions At Chegg

The Independent Director Theodore Schlein made the biggest insider purchase in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$28.54 each. Even though the purchase was made at a significantly lower price than the recent price (US$33.73), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Chegg insiders may have bought shares in the last year, but they didn't sell any. 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!

Chegg is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Chegg insiders own 2.2% of the company, currently worth about US$100m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Chegg Insiders?

The fact that there have been no Chegg insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Chegg insiders think the business has merit. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Chegg has 1 warning sign and it would be unwise to ignore it.