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A number of insiders bought Cedar Woods Properties Limited (ASX:CWP) stock last year, which is great news for shareholders

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·3 min read
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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Cedar Woods Properties Limited (ASX:CWP), that sends out a positive message to the company's shareholders.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Cedar Woods Properties

The Last 12 Months Of Insider Transactions At Cedar Woods Properties

The Founder & Chairman William Hames made the biggest insider purchase in the last 12 months. That single transaction was for AU$201k worth of shares at a price of AU$4.68 each. That means that an insider was happy to buy shares at above the current price of AU$4.25. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. 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.

Cedar Woods Properties insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Cedar Woods Properties Insiders Bought Stock Recently

Over the last quarter, Cedar Woods Properties insiders have spent a meaningful amount on shares. In total, insiders bought AU$194k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Insider Ownership of Cedar Woods Properties

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Cedar Woods Properties insiders own 15% of the company, worth about AU$54m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Cedar Woods Properties Tell Us?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Cedar Woods Properties insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Cedar Woods Properties has 2 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

Of course Cedar Woods Properties 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.