Insiders Re-Evaluate Their US$4.49m Stock Purchase As CENTR Brands Falls To CA$8.7m

The recent price decline of 65% in CENTR Brands Corp.'s (CSE:CNTR) stock may have disappointed insiders who bought US$4.49m worth of shares at an average price of US$0.35 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$781.5k, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for CENTR Brands

The Last 12 Months Of Insider Transactions At CENTR Brands

The insider Paul Meehan made the biggest insider purchase in the last 12 months. That single transaction was for CA$2.7m worth of shares at a price of CA$0.30 each. That means that an insider was happy to buy shares at above the current price of CA$0.06. 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. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months insiders purchased 13.02m shares for CA$4.5m. But insiders sold 325.50k shares worth CA$115k. In total, CENTR Brands insiders bought more than they sold over the last year. Their average price was about CA$0.35. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

CENTR Brands is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Are CENTR Brands Insiders Buying Or Selling?

There was some insider buying at CENTR Brands over the last quarter. Founder Arjan Chima purchased CA$12k worth of shares in that period. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership

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. CENTR Brands insiders own 45% of the company, currently worth about CA$3.9m 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 CENTR Brands Tell Us?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like CENTR Brands insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the 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 CENTR Brands has 6 warning signs (5 are a bit unpleasant!) that deserve your attention before going any further with your analysis.

But note: CENTR Brands 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 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.