Yahoo Finance Positive Signs As Multiple Insiders Buy Cloud DX Stock
It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Cloud DX Inc.'s (CVE:CDX) case, it's fantastic news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Cloud DX
Cloud DX Insider Transactions Over The Last Year
The Independent Director Gaurav Puri made the biggest insider purchase in the last 12 months. That single transaction was for CA$83k worth of shares at a price of CA$0.13 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.12). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Cloud DX insiders may have bought shares in the last year, but they didn't sell any. They paid about CA$0.11 on average. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Cloud DX 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.
Insiders At Cloud DX Have Bought Stock Recently
Over the last quarter, Cloud DX insiders have spent a meaningful amount on shares. Independent Director Gaurav Puri spent CA$136k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Insider Ownership Of Cloud DX
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Cloud DX insiders own about CA$4.4m worth of shares. That equates to 38% 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 Do The Cloud DX Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Cloud DX shares, given these transactions (along with notable insider ownership of the company). 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. When we did our research, we found 6 warning signs for Cloud DX (3 are potentially serious!) that we believe deserve your full attention.
Of course Cloud DX 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 of direct interests only, but not derivative transactions or indirect interests.
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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.
