CDW Corporation (NASDAQ:CDW) insiders have a reason to boast after seeing a US$5.9k addition to their US$1.5m investment
Insiders who bought CDW Corporation (NASDAQ:CDW) stock in the last 12 months were richly rewarded last week. The company's market value increased by US$1.3b as a result of the stock's 5.8% gain over the same period. Put another way, the original US$1.5m acquisition is now worth US$1.5m.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for CDW
CDW Insider Transactions Over The Last Year
The President Christine Leahy made the biggest insider purchase in the last 12 months. That single transaction was for US$500k worth of shares at a price of US$181 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$176). It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.
Happily, we note that in the last year insiders paid US$1.5m for 8.79k shares. But they sold 2.37k shares for US$467k. In the last twelve months there was more buying than selling by CDW insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
CDW is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
CDW Insiders Bought Stock Recently
It's good to see that CDW insiders have made notable investments in the company's shares. Overall, two insiders shelled out US$742k for shares in the company -- and none sold. That shows some optimism about the company's future.
Does CDW Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that CDW insiders own 0.4% of the company, worth about US$93m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The CDW Insider Transactions Indicate?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest CDW insiders are well aligned, and that they may think the share price is too low. 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. Case in point: We've spotted 1 warning sign for CDW you should be aware of.
But note: CDW 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.
