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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 Copper Search Limited's (ASX:CUS) instance, it's good news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Copper Search
Copper Search Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Peter McIntyre for AU$100k worth of shares, at about AU$0.13 per share. That means that an insider was happy to buy shares at above the current price of AU$0.042. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While Copper Search insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Copper Search 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.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Copper Search insiders own 14% of the company, worth about AU$677k. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Copper Search Insiders?
The fact that there have been no Copper Search insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Copper Search insiders are doubting the company. 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. Our analysis shows 6 warning signs for Copper Search (5 are potentially serious!) and we strongly recommend you look at these before investing.