Possible turnaround for Carbeeza Inc. (CVE:AUTO) insiders, still down CA$122k after a CA$1.3m shopping spree

Insiders who purchased CA$1.3m worth of Carbeeza Inc. (CVE:AUTO) shares over the past year recouped some of their losses after price gained 13% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at CA$122k since the time of purchase.

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.

View our latest analysis for Carbeeza

Carbeeza Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by President Sandro Torrieri for CA$1m worth of shares, at about CA$0.20 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.18). 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Carbeeza insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Carbeeza 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.

Carbeeza Insiders Bought Stock Recently

Over the last quarter, Carbeeza 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. That shows some optimism about the company's future.

Insider Ownership Of Carbeeza

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Carbeeza insiders own about CA$8.2m worth of shares (which is 65% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Carbeeza Insider Transactions Indicate?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Carbeeza insiders are well aligned, and quite possibly think the share price is too low. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Carbeeza is showing 4 warning signs in our investment analysis, and 3 of those make us uncomfortable...

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, 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.