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Bullish insiders at Candy Club Holdings Limited (ASX:CLB) loaded up on US$4.1m of stock earlier this year

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Quite a few insiders have dramatically grown their holdings in Candy Club Holdings Limited (ASX:CLB) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Candy Club Holdings

Candy Club Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Chairman James Baillieu bought AU$1.7m worth of shares at a price of AU$0.22 per share. That means that an insider was happy to buy shares at above the current price of AU$0.06. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. 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.

In the last twelve months insiders purchased 21.44m shares for AU$4.1m. On the other hand they divested 1.25m shares, for AU$225k. Overall, Candy Club Holdings insiders were net buyers during the last year. Their average price was about AU$0.19. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Candy Club Holdings Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Candy Club Holdings insiders own about AU$4.7m worth of shares. That equates to 21% 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.

What Might The Insider Transactions At Candy Club Holdings Tell Us?

It doesn't really mean much that no insider has traded Candy Club Holdings shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Candy Club Holdings insiders are doubting the company, and they do own shares. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 4 warning signs for Candy Club Holdings (2 can't be ignored!) and we strongly recommend you look at them before investing.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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