Cromwell Property Group (ASX:CMW) Insiders Increased Their Holdings

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Cromwell Property Group (ASX:CMW).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for Cromwell Property Group

The Last 12 Months Of Insider Transactions At Cromwell Property Group

The insider Gordon Tang made the biggest insider purchase in the last 12 months. That single transaction was for AU$114m worth of shares at a price of AU$0.79 each. So it's clear an insider wanted to buy, at around the current price, which is AU$0.82. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Cromwell Property Group share holders is that insiders were buying at near the current price.

Happily, we note that in the last year insiders paid AU$186m for 217.58m shares. But insiders sold 125.00k shares worth AU$131k. In the last twelve months there was more buying than selling by Cromwell Property Group insiders. 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!

Cromwell Property Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership of Cromwell Property Group

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Cromwell Property Group insiders own 15% of the company, currently worth about AU$332m based on the recent share price. 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 Cromwell Property Group Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Cromwell Property Group insiders feel good about the company's future. 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, Cromwell Property Group has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

But note: Cromwell Property Group 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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