Michael Davis Bought 42% More Shares In Cyanotech

Potential Cyanotech Corporation (NASDAQ:CYAN) shareholders may wish to note that the Independent Chairman of the Board, Michael Davis, recently bought US$400k worth of stock, paying US$1.00 for each share. That's a very solid buy in our book, and increased their holding by a noteworthy 42%.

View our latest analysis for Cyanotech

Cyanotech Insider Transactions Over The Last Year

Notably, that recent purchase by Michael Davis is the biggest insider purchase of Cyanotech shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of US$0.95. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Michael Davis was the only individual insider to buy shares in the last twelve months.

Michael Davis bought a total of 487.57k shares over the year at an average price of US$0.97. 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!

Cyanotech is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership

Many investors like to check how much of a company is owned by 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. Cyanotech insiders own about US$1.8m worth of shares. That equates to 28% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Cyanotech Insider Transactions Indicate?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Cyanotech shares, given these transactions (along with notable insider ownership of the company). 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. Case in point: We've spotted 2 warning signs for Cyanotech you should be aware of, and 1 of these is significant.

But note: Cyanotech 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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