We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Calix, Inc. (NYSE:CALX).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
The Last 12 Months Of Insider Transactions At Calix
In the last twelve months, the biggest single purchase by an insider was when Independent Director Kevin DeNuccio bought US$269k worth of shares at a price of US$6.98 per share. That implies that an insider found the current price of US$7.12 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. The good news for Calix share holders is that insiders were buying at near the current price.
Over the last year, we can see that insiders have bought 106k shares worth US$810k. But they sold 34000 for US$277k. In the last twelve months there was more buying than selling by Calix insiders. 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).
Calix Insiders Bought Stock Recently
Over the last quarter, Calix insiders have spent a meaningful amount on shares. Overall, 2 insiders shelled out US$176k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.
Does Calix Boast High Insider Ownership?
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 13% of Calix shares, worth about US$51m. 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 Calix Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Calix we think they are probably pretty confident of a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Calix.
Of course Calix may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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