Insider Stock Buying Reaches CA$4.16m On CAE

Multiple insiders secured a larger position in CAE Inc. (TSE:CAE) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

We've discovered 1 warning sign about CAE. View them for free.

The Last 12 Months Of Insider Transactions At CAE

Over the last year, we can see that the biggest insider purchase was by President Marc Parent for CA$862k worth of shares, at about CA$25.36 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$32.45. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months CAE insiders were buying shares, but not selling. The average buy price was around CA$29.03. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. 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!

View our latest analysis for CAE

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.

CAE Insiders Bought Stock Recently

Over the last quarter, CAE insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought CA$1.2m worth of shares. This is a positive in our book as it implies some confidence.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that CAE insiders own 0.2% of the company, worth about CA$22m. 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 Do The CAE Insider Transactions Indicate?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of CAE we think they are probably pretty confident of a bright 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. Case in point: We've spotted 1 warning sign for CAE you should be aware of.

Of course CAE 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 of direct interests only, but not derivative transactions or indirect interests.

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