Keep An Eye On Cryosite As Insider Stock Selling Hits AU$8.3m

Despite the fact that Cryosite Limited (ASX:CTE) stock rose 14% last week, insiders who sold AU$8.3m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of AU$1.02, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

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.

View our latest analysis for Cryosite

Cryosite Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Andrew Kroger, for AU$7.3m worth of shares, at about AU$1.05 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of AU$0.85. So it may not shed much light on insider confidence at current levels.

Over the last year, we can see that insiders have bought 5.00m shares worth AU$4.6m. But insiders sold 8.15m shares worth AU$8.3m. All up, insiders sold more shares in Cryosite than they bought, over the last year. The sellers received a price of around AU$1.02, on average. Insider selling doesn't make us excited to buy. But the selling was at much higher prices than the current share price (AU$0.85), so it probably doesn't tell us a lot about the value on offer today. 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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership Of Cryosite

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Cryosite insiders own 60% of the company, worth about AU$25m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of 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. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Cryosite insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for Cryosite (1 is a bit unpleasant!) that we believe deserve your full attention.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.