Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Compass Minerals International, Inc. (NYSE:CMP).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Compass Minerals International
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Chairman Richard Grant for US$105k worth of shares, at about US$52.54 per share. That means that an insider was happy to buy shares at around the current price of US$56.28. 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 Compass Minerals International share holders is that insiders were buying at near the current price.
Over the last year, we can see that insiders have bought 7447 shares worth US$388k. In the last twelve months Compass Minerals International insiders were buying shares, but not selling. You can see the insider transactions (by 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!
Compass Minerals International 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.
Insiders at Compass Minerals International Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Compass Minerals International. Overall, five insiders shelled out US$336k for shares in the company — and none sold. That shows some optimism about the company’s future.
Insider Ownership of Compass Minerals International
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. From our data, it seems that Compass Minerals International insiders own 0.4% of the company, worth about US$6.7m. Whilst better than nothing, we’re not overly impressed by these holdings.
What Might The Insider Transactions At Compass Minerals International Tell Us?
It’s certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Compass Minerals International stock. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Compass Minerals International.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.