Cleveland-Cliffs Inc. (NYSE:CLF) shareholders (or potential shareholders) will be happy to see that the Chairman, C. Goncalves, recently bought a whopping US$898k worth of stock, at a price of US$4.49. While that only increased their holding size by 6.8%, it is still a big swing by our standards.
See our latest analysis for Cleveland-Cliffs
The Last 12 Months Of Insider Transactions At Cleveland-Cliffs
In fact, the recent purchase by C. Goncalves was the biggest purchase of Cleveland-Cliffs shares made by an insider individual in the last twelve months, according to our records. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$4.06). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. 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.
In the last twelve months Cleveland-Cliffs insiders were buying shares, but not selling. The average buy price was around US$5.95. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Cleveland-Cliffs Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Cleveland-Cliffs insiders own about US$22m worth of shares. That equates to 2.0% 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.
What Might The Insider Transactions At Cleveland-Cliffs Tell Us?
It’s certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Cleveland-Cliffs insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Cleveland-Cliffs. When we did our research, we found 6 warning signs for Cleveland-Cliffs (2 are a bit unpleasant!) that we believe deserve your full attention.
Of course Cleveland-Cliffs 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.