Investors who take an interest in The Chemours Company (NYSE:CC) should definitely note that the Independent Chairman of the Board, Richard Brown, recently paid US$14.06 per share to buy US$105k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 60%, potentially signalling some real optimism.
The Last 12 Months Of Insider Transactions At Chemours
President Mark Vergnano made the biggest insider purchase in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$23.17 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$11.54). It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.
Happily, we note that in the last year insiders paid US$2.3m for 121.33k shares. But they sold 1080 shares for US$42k. Overall, Chemours insiders were net buyers last year. They paid about US$18.70 on average. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by 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!
Chemours is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Chemours 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. It appears that Chemours insiders own 1.1% of the company, worth about US$20m. 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 Do The Chemours Insider Transactions Indicate?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Chemours we think they are probably pretty confident of a bright 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 3 warning signs for Chemours you should be aware of, and 1 of them makes us a bit uncomfortable.
Of course Chemours 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.
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