Over the past year, numerous insiders have significantly increased their holdings of Caledonia Investments Plc (LON: CLDN ), indicating that insiders’ optimism about the company’s prospects has increased.
Although insider trading is not the most important thing when it comes to long-term investing, we would be foolish to ignore insider trading entirely.
Check out our latest analysis on Caledonia Investments
Last 12 months of insider trading at Caledonia Investments
Over the past year we can see that the biggest insider purchase was from non-executive director William Wyatt for £590,000 worth of shares, at around £34.76 per share. This means that even when the share price was higher than £32.75 (the last price), an insider wanted to buy shares. While their opinions may have changed after the purchase, it at least suggests they had confidence in the company’s future. It is very important for us to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Over the last year we can see that insiders bought 27.49k shares worth £949k. But insiders sold 4.66k shares worth £161k. Overall, Caledonia Investments insiders have been net buyers over the past year. You can see insider trading (by company and individual) over the past year shown in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, the individuals and the date!
Caledonia Investments isn’t the only stock insiders are buying. For those who like to find profitable investments this Free of charge a list of growth companies with recent insider purchases may be just the ticket.
Caledonia Investments insiders bought shares recently
In the last quarter, Caledonia Investments insiders spent a significant amount on shares. Specifically, non-executive director William Wyatt bought £260k worth of shares in the UK during this time and we did not record any sales. This can be interpreted as suggesting a positive outlook.
Does Caledonia Investments boast high insider ownership?
Another way to test the fit between a company’s leaders and other shareholders is to look at how many shares they own. I think it’s a good sign if insiders own a significant number of shares in the company. Caledonia Investments insiders own shares worth around £65m. This equates to 3.6% of the company. While this is a strong but not exceptional level of insider ownership, it is enough to show some alignment between management and smaller shareholders.
What can insider trading at Caledonia Investments tell us?
Recent domestic buying is encouraging. We also trust the longer-term picture of insider trading. Given that insiders also own a fairly large portion of Caledonia Investments, we think they are probably quite confident of a bright future. Along with insider trading, I recommend checking if Caledonia Investments is growing revenue. This free historical revenue and earnings chart should make that easy.
But notice: Caledonia Investments may not be the best stock to buy. So take a peek at this Free of charge list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those persons who report their transactions to the relevant regulatory authority. We currently report open market transactions and private dispositions only with direct interests, but not derivative transactions or indirect interests.
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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts, using only an unbiased methodology, and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. We aim to provide you with long-term focused analysis driven by fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.