Insider Buying: The Challenger Limited (ASX:CGF) Independent Non-Executive Director Just Bought AU$67k Worth Of Shares

Even if it's not a huge purchase, we think it was good to see that Heather Smith, the Independent Non-Executive Director of Challenger Limited (ASX:CGF) recently shelled out AU$67k to buy stock, at AU$6.67 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

View our latest analysis for Challenger

Challenger Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when MD, CEO & Director Richard Howes bought AU$958k worth of shares at a price of AU$3.83 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$6.44), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Happily, we note that in the last year insiders paid AU$1.4m for 360.00k shares. But they sold 100.00k shares for AU$384k. In total, Challenger insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Challenger 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.

Insider Ownership of Challenger

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Challenger insiders own about AU$12m worth of shares (which is 0.3% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Challenger Insider Transactions Indicate?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Challenger 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. Every company has risks, and we've spotted 3 warning signs for Challenger (of which 1 shouldn't be ignored!) you should know about.

Of course Challenger 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.

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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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