Insiders who bought stock earlier this year lose -AU$35k as Cromwell Property Group (ASX:CMW) drops to AU$1.7b

The recent 7.6% drop in Cromwell Property Group's (ASX:CMW) stock could come as a blow to insiders who purchased AU$434k worth of stock at an average buy price of AU$0.72 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$399k, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Cromwell Property Group

The Last 12 Months Of Insider Transactions At Cromwell Property Group

In the last twelve months, the biggest single purchase by an insider was when Deputy Chair & Senior Independent Director Eng-Peng Ooi bought AU$146k worth of shares at a price of AU$0.75 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.67). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Cromwell Property Group insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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 Cromwell Property Group Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Cromwell Property Group insiders own 14% of the company, worth about AU$245m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Cromwell Property Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Cromwell Property Group shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Cromwell Property Group insiders feel good about the company's future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that Cromwell Property Group has 4 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

Of course Cromwell Property Group may not be the best stock to buy. So you may wish to see this free collection of high quality 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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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.