Quite a few insiders have dramatically grown their holdings in Credit Clear Limited (ASX:CCR) over the past 12 months. An insider’s optimism about the company’s prospects is a positive sign.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Credit Clear Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Chairman Paul Dwyer bought AU$1.3m worth of shares at a price of AU$0.45 per share. That means that even when the share price was higher than AU$0.21 (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. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Credit Clear insiders bought shares during the last year, they didn’t sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership Of Credit Clear
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. Credit Clear insiders own about AU$36m worth of shares (which is 42% of the company). 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 Credit Clear Tell Us?
It doesn’t really mean much that no insider has traded Credit Clear shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Credit Clear insiders feel good about the company’s future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. For instance, we’ve identified 3 warning signs for Credit Clear (1 is a bit concerning) you should be aware of.
But note: Credit Clear may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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