Insider Buyers Lose Additional US$38k As Compass Minerals International Dips To US$837m

Insiders who bought US$200.3k worth of Compass Minerals International, Inc.'s (NYSE:CMP) stock at an average buy price of US$23.55 over the last year may be disappointed by the recent 13% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$162.6k which is not ideal.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Compass Minerals International

The Last 12 Months Of Insider Transactions At Compass Minerals International

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Chairman of the Board Joseph Reece bought US$106k worth of shares at a price of US$21.24 per share. That means that even when the share price was higher than US$19.12 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Compass Minerals International insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around US$23.55. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Insiders At Compass Minerals International Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Compass Minerals International. Independent Non-Executive Chairman of the Board Joseph Reece spent US$106k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Compass Minerals International

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.8% of Compass Minerals International shares, worth about US$6.4m, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Compass Minerals International Tell Us?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Compass Minerals International insiders are reasonably well aligned, and optimistic for the future. While we like knowing 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. In terms of investment risks, we've identified 2 warning signs with Compass Minerals International and understanding these should be part of your investment process.

But note: Compass Minerals International 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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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.