Great news for The Colonial Motor Company Limited (NZSE:CMO): Insiders acquired stock in large numbers last year
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of The Colonial Motor Company Limited (NZSE:CMO), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Colonial Motor
Colonial Motor Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Maarten Duurentijdt for NZ$275k worth of shares, at about NZ$10.59 per share. That implies that an insider found the current price of NZ$10.74 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Colonial Motor share holders is that insiders were buying at near the current price.
In the last twelve months Colonial Motor insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Colonial Motor is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Colonial Motor Have Bought Stock Recently
We saw some Colonial Motor insider buying shares in the last three months. Executive Director Matthew Newman shelled out NZ$16k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership of Colonial Motor
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Colonial Motor insiders own 77% of the company, currently worth about NZ$272m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Colonial Motor Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Colonial Motor insiders think the business has merit. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 1 warning sign for Colonial Motor you should be aware of.
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.
