Insider Buying: Colonial Motor Group Manager of People Bought NZ$83k Of Shares

Whilst it may not be a huge deal, we thought it was good to see that the The Colonial Motor Company Limited (NZSE:CMO) Group Manager of People, June Gibbons, recently bought NZ$83k worth of stock, for NZ$8.34 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

View our latest analysis for Colonial Motor

The Last 12 Months Of Insider Transactions At Colonial Motor

The Executive Director Graeme Gibbons made the biggest insider purchase in the last 12 months. That single transaction was for NZ$810k worth of shares at a price of NZ$9.00 each. That means that an insider was happy to buy shares at above the current price of NZ$8.25. 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.

Happily, we note that in the last year insiders paid NZ$2.7m for 302.00k shares. On the other hand they divested 45.00k shares, for NZ$396k. In the last twelve months there was more buying than selling by Colonial Motor insiders. 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!

Colonial Motor 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.

Does Colonial Motor 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Colonial Motor insiders own about NZ$198m worth of shares (which is 73% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Colonial Motor Insiders?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Colonial Motor. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 2 warning signs for Colonial Motor (1 is significant) you should be aware of.

Of course Colonial Motor 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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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.