Bullish Cleveland-Cliffs Insider Buying Worth US$2.71m Yet To Pay Off

Insiders who bought US$2.71m worth of Cleveland-Cliffs Inc.'s (NYSE:CLF) stock at an average buy price of US$16.77 over the last year may be disappointed by the recent 19% decrease in the stock. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$1.60m.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Cleveland-Cliffs

Cleveland-Cliffs Insider Transactions Over The Last Year

The Chairman C. Goncalves made the biggest insider purchase in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$16.76 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$9.89). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Happily, we note that in the last year insiders paid US$2.7m for 161.45k shares. But they sold 44.05k shares for US$686k. Overall, Cleveland-Cliffs insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Cleveland-Cliffs is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Cleveland-Cliffs Have Sold Stock Recently

The last three months saw some Cleveland-Cliffs insider selling. Director Ron Bloom sold just US$18k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 1.8% of Cleveland-Cliffs shares, worth about US$89m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Cleveland-Cliffs Tell Us?

Our data shows a little more insider selling, but no insider buying, in the last three months. However, the sales are not big enough to concern us at all. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Cleveland-Cliffs and we see no evidence to suggest they are worried about the future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 1 warning sign for Cleveland-Cliffs you should know about.

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.