Over the last year, a good number of insiders have significantly increased their holdings in CLS Holdings plc (LON:CLI). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At CLS Holdings
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Deputy Chair of the Board Anna Seeley bought UK£225m worth of shares at a price of UK£2.00 per share. That means that even when the share price was higher than UK£1.59 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. 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. Notably Anna Seeley was also the biggest seller.
Happily, we note that in the last year insiders paid UK£226m for 113.03m shares. On the other hand they divested 5.26m shares, for UK£13m. In total, CLS Holdings insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
CLS Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
CLS Holdings Insiders Are Selling The Stock
We've seen more insider selling than insider buying at CLS Holdings recently. In total, insiders sold UK£13m worth of shares in that time. On the flip side, insiders spent UK£611k on purchasing shares. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.
Insider Ownership Of CLS Holdings
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. CLS Holdings insiders own about UK£42m worth of shares. That equates to 6.6% of the company. 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 Does This Data Suggest About CLS Holdings Insiders?
The insider sales have outweighed the insider buying, at CLS Holdings, in the last three months. On the other hand, the insider transactions over the last year are encouraging. We like that insiders own a fair amount of the company. So we're not overly bothered by recent selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CLS Holdings. To help with this, we've discovered 5 warning signs (2 are concerning!) that you ought to be aware of before buying any shares in CLS Holdings.
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.
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.
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