Yahoo Finance Insiders who bought this year lost UK£6.3k as CMC Markets plc (LON:CMCX) sheds UK£52m in value
The recent 7.0% drop in CMC Markets plc's (LON:CMCX) stock could come as a blow to insiders who purchased UK£50k worth of stock at an average buy price of UK£2.75 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth UK£44k, which is not what they expected.
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.
See our latest analysis for CMC Markets
CMC Markets Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Independent Non-Executive Director, Clare Salmon, sold UK£50k worth of shares at a price of UK£4.09 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (UK£2.41). So it is hard to draw any strong conclusion from it. Clare Salmon was the only individual insider to sell shares in the last twelve months.
In the last twelve months insiders purchased 18.22k shares for UK£50k. But insiders sold 12.23k shares worth UK£50k. In the last twelve months there was more buying than selling by CMC Markets insiders. Their average price was about UK£2.75. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
CMC Markets 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.
CMC Markets Insiders Bought Stock Recently
We saw some CMC Markets insider buying shares in the last three months. CFO & Director Euan Marshall purchased UK£34k worth of shares in that period. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that CMC Markets insiders own 60% of the company, worth about UK£421m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The CMC Markets Insider Transactions Indicate?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, CMC Markets insiders feel good about the company's 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. Every company has risks, and we've spotted 3 warning signs for CMC Markets you should know about.
Of course CMC Markets 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.
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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