Change Financial's Market Cap Up AU$4.4m Following Year Of Insider Stock Buying

Change Financial Limited (ASX:CCA) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 15%, resulting in a AU$4.4m rise in the company's market capitalisation, translating to a gain of 11% on their initial investment. Put another way, the original US$578.6k acquisition is now worth US$644.6k.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Change Financial

Change Financial Insider Transactions Over The Last Year

The insider Michael Giles made the biggest insider purchase in the last 12 months. That single transaction was for AU$554k worth of shares at a price of AU$0.054 each. So it's clear an insider wanted to buy, at around the current price, which is AU$0.055. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Change Financial share holders is that insiders were buying at near the current price.

While Change Financial insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Change Financial is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Change Financial insiders own about AU$9.2m worth of shares. That equates to 27% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Change Financial Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Change Financial and their transactions don't cause us concern. 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 Change Financial and understanding these should be part of your investment process.

But note: Change Financial may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.