It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in COSOL Limited's (ASX:COS) 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.
View our latest analysis for COSOL
The Last 12 Months Of Insider Transactions At COSOL
The insider, Bradley Skeggs, made the biggest insider sale in the last 12 months. That single transaction was for AU$778k worth of shares at a price of AU$0.80 each. That means that even when the share price was below the current price of AU$0.85, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 13% of Bradley Skeggs's holding.
Over the last year, we can see that insiders have bought 1.31m shares worth AU$1m. But insiders sold 1.04m shares worth AU$828k. In the last twelve months there was more buying than selling by COSOL insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
COSOL Insiders Bought Stock Recently
It's good to see that COSOL insiders have made notable investments in the company's shares. In total, insiders bought AU$1m worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Insider Ownership Of COSOL
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. COSOL insiders own 49% of the company, currently worth about AU$72m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At COSOL Tell Us?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest COSOL insiders are well aligned, and quite possibly think the share price is too low. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing COSOL. In terms of investment risks, we've identified 3 warning signs with COSOL and understanding them should be part of your investment process.