We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Caltex Australia Limited (ASX:CTX), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’

Check out our latest analysis for Caltex Australia

Caltex Australia Insider Transactions Over The Last Year

Chairman Steven Gregg made the biggest insider purchase in the last 12 months. That single transaction was for AU$181k worth of shares at a price of AU$30.22 each. So it’s clear an insider wanted to buy, even at a higher price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We generally consider it a positive if insiders have been buying on market, even above the current price.

In the last twelve months insiders paid AU$377k for 12.90k shares purchased. In the last twelve months there was more buying than selling by Caltex Australia insiders. Their average price was about AU$29.23. These transactions suggest that insiders have considered the current price of AU$26.84 attractive. You can see the insider transactions 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!

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.

Caltex Australia Insiders Bought Stock Recently

We saw some Caltex Australia insider buying shares in the last three months. Insiders bought AU$67k worth of shares in that time. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.

Insider Ownership of Caltex Australia

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that Caltex Australia insiders own 0.2% of the company, worth about AU$11m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Caltex Australia Tell Us?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Caltex Australia we think they are probably pretty confident of a bright future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.