With Cemat Up 13%, Insider Buyers Count Their Returns

Last week, Cemat A/S (CPH:CEMAT) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 13% last week, resulting in a kr.28m increase in the company's market worth, implying a 22% gain on their initial purchase. As a result, the stock they originally bought for kr.1.11m is now worth kr.1.36m.

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.

Check out our latest analysis for Cemat

The Last 12 Months Of Insider Transactions At Cemat

In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Frede Clausen bought kr.350k worth of shares at a price of kr.0.70 per share. We do like to see buying, but this purchase was made at well below the current price of kr.0.95. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months Cemat insiders were buying shares, but not selling. Their average price was about kr.0.78. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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).

Cemat Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Cemat. Chairman of the Board Frede Clausen shelled out kr.335k for shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Cemat insiders own 5.7% of the company, worth about kr.13m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Cemat Tell Us?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Cemat insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 3 warning signs with Cemat and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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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.