Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Costa Group Holdings Limited (ASX:CGC), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'

See our latest analysis for Costa Group Holdings

The Last 12 Months Of Insider Transactions At Costa Group Holdings

In the last twelve months, the biggest single sale by an insider was when the CEO, MD & Executive Director, Harry Debney, sold AU$1.1m worth of shares at a price of AU$5.29 per share. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. The silver lining is that this sell-down took place above the latest price (AU$4.04). So it is hard to draw any strong conclusion from it. Harry Debney was the only individual insider to sell shares in the last twelve months.

In the last twelve months insiders purchased 62668 shares for AU$286k. On the other hand they divested 208k shares, for AU$1.1m. You can see the insider transactions (by 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders at Costa Group Holdings Have Bought Stock Recently

Over the last quarter, Costa Group Holdings insiders have spent a meaningful amount on shares. In total, insiders bought AU$157k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

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. Insiders own 5.5% of Costa Group Holdings shares, worth about AU$71m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Costa Group Holdings Tell Us?

The recent insider purchases are heartening. But we can't say the same for the transactions over the last 12 months. The more recent transactions are a positive, but Costa Group Holdings insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. Overall they seem reasonably aligned. Of course, the future is what matters most. So if you are interested in Costa Group Holdings, you should check out this free report on analyst forecasts for the company.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.