Multiple insiders bought Champion Iron Limited (ASX:CIA) stock earlier this year, a positive sign for shareholders
It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Champion Iron Limited's (ASX:CIA) case, it's fantastic news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Champion Iron
Champion Iron Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Gary Kenneth Lawler bought AU$81k worth of shares at a price of AU$4.09 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$6.92), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months Champion Iron insiders were buying shares, but not selling. 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!
Champion Iron is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Champion Iron Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Champion Iron insiders own 13% of the company, currently worth about AU$470m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Champion Iron Insider Transactions Indicate?
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. With high insider ownership and encouraging transactions, it seems like Champion Iron insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Champion Iron. Our analysis shows 5 warning signs for Champion Iron (2 can't be ignored!) and we strongly recommend you look at them before investing.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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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.
