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Insiders rewarded with a US$198k addition on top of their US$8.0m purchase as Claros Mortgage Trust, Inc. (NYSE:CMTG) hits US$2.6b

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Claros Mortgage Trust, Inc. (NYSE:CMTG) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 3.5% resulting in a US$87m addition to the company’s market value. As a result, the stock they originally bought for US$8.0m is now worth US$8.2m.

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 Claros Mortgage Trust

Claros Mortgage Trust Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Chairman & CEO Richard Mack bought US$5.0m worth of shares at a price of US$18.65 per share. That means that an insider was happy to buy shares at above the current price of US$18.51. 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. 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.

While Claros Mortgage Trust insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

Claros Mortgage Trust is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Claros Mortgage Trust 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.7% of Claros Mortgage Trust shares, worth about US$17m. 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 Claros Mortgage Trust Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders own shares in Claros Mortgage Trust and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Claros Mortgage Trust you should be aware of, and 1 of these makes us a bit uncomfortable.

Of course Claros Mortgage Trust may not be the best stock to buy. So you may wish to see this free collection of high quality 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.