Insiders who bought US$880k worth of Connexion Telematics Ltd’s (ASX:CXZ) stock at an average buy price of US$0.019 over the last year may be disappointed by the recent 12% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$694k which is not ideal.
Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Connexion Telematics
The Last 12 Months Of Insider Transactions At Connexion Telematics
Over the last year, we can see that the biggest insider purchase was by insider Vaughan Kent for AU$880k worth of shares, at about AU$0.019 per share. That means that even when the share price was higher than AU$0.015 (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. To us, it’s very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Vaughan Kent.
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!
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.
Insider Ownership
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 33% of Connexion Telematics shares, worth about AU$4.3m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Connexion Telematics Insider Transactions Indicate?
It’s certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Insiders likely see value in Connexion Telematics shares, given these transactions (along with notable insider ownership of the company). So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. To that end, you should learn about the 4 warning signs we’ve spotted with Connexion Telematics (including 1 which is potentially serious).
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.
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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