As Cryosite Limited's (ASX:CTE) market cap increased AU$2.7m, insiders who bought last year may be reflecting on buying more

By
Simply Wall St
Published
December 10, 2021
ASX:CTE
Source: Shutterstock

Last week, Cryosite Limited (ASX:CTE) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 16% last week, resulting in a AU$2.7m increase in the company's market worth. In other words, the original AU$609k purchase is now worth AU$1.6m.

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 Cryosite

The Last 12 Months Of Insider Transactions At Cryosite

The insider Gary Robins made the biggest insider purchase in the last 12 months. That single transaction was for AU$401k worth of shares at a price of AU$0.16 each. We do like to see buying, but this purchase was made at well below the current price of AU$0.41. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months Cryosite 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. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
ASX:CTE Insider Trading Volume December 10th 2021

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Cryosite Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Cryosite insiders own 46% of the company, currently worth about AU$9.1m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Cryosite 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. With high insider ownership and encouraging transactions, it seems like Cryosite insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Cryosite has 3 warning signs we think you should be aware of.

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, but not derivative transactions.

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