We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Cymat Technologies Ltd. (CVE:CYM).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
The Last 12 Months Of Insider Transactions At Cymat Technologies
In the last twelve months, the biggest single purchase by an insider was when insider Horace Boone bought CA$87k worth of shares at a price of CA$0.32 per share. That implies that an insider found the current price of CA$0.32 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Cymat Technologies insiders decided to buy shares at close to current prices.
Happily, we note that in the last year insiders paid CA$115k for 383.21k shares. But insiders sold 74457 shares worth CA$22k. Overall, Cymat Technologies insiders were net buyers last year. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Cymat Technologies is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Are Cymat Technologies Insiders Buying Or Selling?
We saw Independent Director Martin Mazza buy shares worth CA$12k in the last three months. However that only slightly eclipses the sales, CA$9.2k worth of sales. Overall, we don't think these recent trades are particularly informative, one way or the other.
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. We usually like to see fairly high levels of insider ownership. Insiders own 17% of Cymat Technologies shares, worth about CA$2.1m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Cymat Technologies Tell Us?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Cymat Technologies insiders are doubting the company, and they do own shares. Along with insider transactions, I recommend checking if Cymat Technologies is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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