Bullish insiders at Cake Box Holdings Plc (LON:CBOX) loaded up on UK£416k of stock earlier this year
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Cake Box Holdings Plc's (LON:CBOX) instance, it's good news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Cake Box Holdings
Cake Box Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Co-Founder Sukh Chamdal for UK£274k worth of shares, at about UK£1.22 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£1.16). 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. 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.
In the last twelve months Cake Box Holdings insiders were buying shares, but not selling. They paid about UK£1.34 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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.
Cake Box Holdings Insiders Bought Stock Recently
Over the last quarter, Cake Box Holdings insiders have spent a meaningful amount on shares. Specifically, Chief Commercial Officer & Director Jaswir Singh bought UK£59k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Insider Ownership Of Cake Box Holdings
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Cake Box Holdings insiders own about UK£14m worth of shares. That equates to 31% of the company. 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 Cake Box Holdings Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Insiders likely see value in Cake Box Holdings shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cake Box Holdings. In terms of investment risks, we've identified 2 warning signs with Cake Box Holdings and understanding these should be part of your investment process.
But note: Cake Box Holdings 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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