Independent Director of Crown Crafts Picks Up 4.3% More Stock

Even if it's not a huge purchase, we think it was good to see that Donald Ratajczak, the Independent Director of Crown Crafts, Inc. (NASDAQ:CRWS) recently shelled out US$50k to buy stock, at US$4.71 per share. Although the purchase is not a big one, increasing their shareholding by only 4.3%, it can be interpreted as a good sign.

See our latest analysis for Crown Crafts

The Last 12 Months Of Insider Transactions At Crown Crafts

Notably, that recent purchase by Independent Director Donald Ratajczak was not the only time they bought Crown Crafts shares this year. They previously made an even bigger purchase of US$59k worth of shares at a price of US$4.70 per share. That implies that an insider found the current price of US$4.76 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Crown Crafts share holders is that insiders were buying at near the current price.

Crown Crafts insiders may have bought shares in the last year, but they didn't sell any. 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!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 8.7% of Crown Crafts shares, worth about US$4.2m, according to our data. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Crown Crafts Insiders?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Crown Crafts insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Crown Crafts (of which 1 is a bit concerning!) you should know about.

Of course Crown Crafts 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.