Several Clever Culture Systems Insiders Sell Shares Sending Potential Negative Signal

Clever Culture Systems Limited (ASX:CC5) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

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.

See our latest analysis for Clever Culture Systems

The Last 12 Months Of Insider Transactions At Clever Culture Systems

In the last twelve months, the biggest single sale by an insider was when the CEO, MD & Director, Brenton Barnes, sold AU$124k worth of shares at a price of AU$0.017 per share. That means that even when the share price was slightly below the current price of AU$0.017, an insider wanted to cash in some shares. 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. It is worth noting that this sale was only 7.0% of Brenton Barnes's holding.

Over the last year we saw more insider selling of Clever Culture Systems shares, than buying. 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!

I will like Clever Culture Systems better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Clever Culture Systems insiders own 25% of the company, worth about AU$7.5m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Clever Culture Systems Insiders?

It doesn't really mean much that no insider has traded Clever Culture Systems shares in the last quarter. Our analysis of Clever Culture Systems insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Clever Culture Systems. To that end, you should learn about the 6 warning signs we've spotted with Clever Culture Systems (including 3 which can't be ignored).

But note: Clever Culture Systems 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.