Quite a few insiders have dramatically grown their holdings in Cornerstone Capital Resources Inc. (CVE:CGP) 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Cornerstone Capital Resources
Over the last year, we can see that the biggest insider purchase was by insider Dmyant Sangha for CA$806k worth of shares, at about CA$3.75 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$3.35). 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. 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.
Happily, we note that in the last year insiders paid CA$807k for 215.12k shares. But they sold 71.65k shares for CA$291k. In the last twelve months there was more buying than selling by Cornerstone Capital Resources insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Cornerstone Capital Resources 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 Cornerstone Capital Resources
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Cornerstone Capital Resources insiders own 15% of the company, worth about CA$18m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Cornerstone Capital Resources Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Cornerstone Capital Resources shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Cornerstone Capital Resources and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 5 warning signs we've spotted with Cornerstone Capital Resources (including 3 which are significant).
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.