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When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Cavendish plc's (LON:CAV) instance, it's good news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
We've discovered 3 warning signs about Cavendish. View them for free.
The Last 12 Months Of Insider Transactions At Cavendish
In the last twelve months, the biggest single purchase by an insider was when Co-CEO & Director Julian Morse bought UK£255k worth of shares at a price of UK£0.088 per share. That means that even when the share price was higher than UK£0.087 (the recent price), an insider wanted to purchase shares. 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Notably Julian Morse was also the biggest seller.
Over the last year, we can see that insiders have bought 3.78m shares worth UK£332k. But they sold 3.15m shares for UK£272k. In total, Cavendish insiders bought more than they sold over the last year. 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!
See our latest analysis for Cavendish
Cavendish is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At Cavendish Have Bought Stock Recently
Over the last three months, we've seen significantly more insider buying, than insider selling, at Cavendish. In total, three insiders bought UK£321k worth of shares in that time. But we did see insider selling worth UK£272k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Insider Ownership Of Cavendish
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Cavendish insiders own about UK£8.6m 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.