Insiders of Clime Investment Management Getting Good Value On Their AU$2.91m Investment

Insiders who bought Clime Investment Management Limited (ASX:CIW) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$2.7m as a result of the stock's 10.0% gain over the same period. As a result, the stock they originally bought for AU$2.91m is now worth AU$3.40m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Clime Investment Management

The Last 12 Months Of Insider Transactions At Clime Investment Management

In the last twelve months, the biggest single purchase by an insider was when insider Wen Ding bought AU$2.7m worth of shares at a price of AU$0.35 per share. That implies that an insider found the current price of AU$0.39 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Clime Investment Management share holders is that insiders were buying at near the current price.

In the last twelve months insiders purchased 8.82m shares for AU$2.9m. But they sold 3.42m shares for AU$1.1m. In total, Clime Investment Management insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Clime Investment Management Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Clime Investment Management. Founder & Non-Independent Executive Chairman John Abernethy bought AU$75k worth of shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

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. Insiders own 27% of Clime Investment Management shares, worth about AU$7.8m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Clime Investment Management Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Clime Investment Management we think they are probably pretty confident of a bright future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To help with this, we've discovered 3 warning signs (2 make us uncomfortable!) that you ought to be aware of before buying any shares in Clime Investment Management.

But note: Clime Investment Management 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.