It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Current Water Technologies Inc. (CVE:WATR).
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.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
Current Water Technologies Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Alexander Kaszuba for CA$120k worth of shares, at about CA$0.02 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.015). It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.
While Current Water Technologies insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Current Water Technologies Insiders Bought Stock Recently
It's good to see that Current Water Technologies insiders have made notable investments in the company's shares. In total, insiders bought CA$330k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Current Water Technologies insiders own about CA$634k worth of shares. That equates to 22% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Current Water Technologies Tell Us?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Current Water Technologies shares, given these transactions (along with notable insider ownership of the company). So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 6 warning signs (2 are potentially serious!) that you ought to be aware of before buying any shares in Current Water Technologies.
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. 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. Thank you for reading.