How Much Are Credit Intelligence Limited (ASX:CI1) Insiders Taking Off The Table?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Credit Intelligence Limited (ASX:CI1), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for Credit Intelligence

The Last 12 Months Of Insider Transactions At Credit Intelligence

The insider, Chee Wei Lim, made the biggest insider sale in the last 12 months. That single transaction was for AU$2.1m worth of shares at a price of AU$0.03 each. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of AU$0.03. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 68% of Chee Wei Lim's stake. Chee Wei Lim was the only individual insider to sell shares in the last twelve months.

In the last twelve months insiders purchased 7.83m shares for AU$212k. But insiders sold 71.03m shares worth AU$2.1m. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Credit Intelligence Insiders Bought Stock Recently

Over the last quarter, Credit Intelligence insiders have spent a meaningful amount on shares. We can see that Independent Non-Executive Director Russell Goodman paid AU$67k for shares in the company. No-one sold. This makes one think the business has some good points.

Insider Ownership of Credit Intelligence

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Credit Intelligence insiders own 64% of the company, worth about AU$24m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Credit Intelligence Insiders?

It is good to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. Overall, we'd prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, Credit Intelligence insiders are reasonably well aligned, and optimistic for the future. 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. In terms of investment risks, we've identified 2 warning signs with Credit Intelligence and understanding them should be part of your investment process.

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. 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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