U.S. Markets close in 2 hrs 54 mins
  • S&P 500

    3,674.58
    +5.57 (+0.15%)
     
  • Dow 30

    30,060.16
    +176.37 (+0.59%)
     
  • Nasdaq

    12,397.13
    +47.76 (+0.39%)
     
  • Russell 2000

    1,857.97
    +19.94 (+1.08%)
     
  • Crude Oil

    45.79
    +0.51 (+1.13%)
     
  • Gold

    1,840.80
    +10.60 (+0.58%)
     
  • Silver

    24.10
    +0.02 (+0.10%)
     
  • EUR/USD

    1.2148
    +0.0032 (+0.2673%)
     
  • 10-Yr Bond

    0.9200
    -0.0280 (-2.95%)
     
  • Vix

    21.14
    -0.03 (-0.14%)
     
  • GBP/USD

    1.3483
    +0.0107 (+0.8022%)
     
  • USD/JPY

    103.8810
    -0.5430 (-0.5200%)
     
  • BTC-USD

    19,344.23
    +395.33 (+2.09%)
     
  • CMC Crypto 200

    380.57
    +6.17 (+1.65%)
     
  • FTSE 100

    6,490.27
    +26.88 (+0.42%)
     
  • Nikkei 225

    26,809.37
    +8.39 (+0.03%)
     

Have Insiders Been Buying CTS Corporation (NYSE:CTS) Shares?

Simply Wall St
·4 min read

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in CTS Corporation (NYSE:CTS).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. 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'.

View our latest analysis for CTS

The Last 12 Months Of Insider Transactions At CTS

In the last twelve months, the biggest single purchase by an insider was when Independent Director Alfonso Zulueta bought US$60k worth of shares at a price of US$23.45 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$21.95). 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. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Alfonso Zulueta was the only individual insider to buy during the last year.

Alfonso Zulueta bought 4.41k shares over the last 12 months at an average price of US$22.57. 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).

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that CTS insiders own 2.3% of the company, worth about US$16m. 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 Does This Data Suggest About CTS Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think CTS insiders are doubting the company, and they do own shares. 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. At Simply Wall St, we found 1 warning sign for CTS that deserve your attention before buying any shares.

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.

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.

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