The recent price decline of 27% in Cryosite Limited’s (ASX:CTE) stock may have disappointed insiders who bought AU$2.3m worth of shares at an average price of AU$0.70 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$1.8m, which is not great.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Cryosite Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Mark Kerr for AU$746k worth of shares, at about AU$0.71 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.56). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it’s very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Mark Kerr was the only individual insider to buy during the last year.
Mark Kerr bought a total of 3.23m shares over the year at an average price of AU$0.70. 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!
Cryosite is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership Of Cryosite
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Cryosite insiders own 58% of the company, currently worth about AU$16m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Cryosite Insiders?
The fact that there have been no Cryosite insider transactions recently certainly doesn’t bother us. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Cryosite 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. You’d be interested to know, that we found 2 warning signs for Cryosite and we suggest you have a look.
But note: Cryosite 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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