Insider Returns Down To AU$43k As Canadian Phosphate's Stock Dips 14%

Insiders who bought Canadian Phosphate Limited (ASX:CP8) in the last 12 months may probably not pay attention to the stock's recent 14% drop. After taking the recent loss into consideration, the AU$170.1k worth of stock they bought is now worth AU$212.7k, indicating that their investment yielded a positive return.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Canadian Phosphate

Canadian Phosphate Insider Transactions Over The Last Year

The Non-Executive Chairman Stuart Richardson made the biggest insider purchase in the last 12 months. That single transaction was for AU$110k worth of shares at a price of AU$0.022 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.03. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Canadian Phosphate insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insiders At Canadian Phosphate Have Bought Stock Recently

Over the last quarter, Canadian Phosphate insiders have spent a meaningful amount on shares. We can see that Non-Executive Chairman Stuart Richardson paid AU$110k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.

Does Canadian Phosphate Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Canadian Phosphate insiders own 27% of the company, worth about AU$2.5m. 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 Does This Data Suggest About Canadian Phosphate Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Canadian Phosphate shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Canadian Phosphate. At Simply Wall St, we've found that Canadian Phosphate has 5 warning signs (3 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.