Bullish Core Scientific Insiders Loaded Up On US$1.90m Of Stock

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Core Scientific, Inc.'s (NASDAQ:CORZ) case, it's fantastic news for shareholders.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Core Scientific

The Last 12 Months Of Insider Transactions At Core Scientific

Over the last year, we can see that the biggest insider purchase was by Independent Director Jordan Levy for US$497k worth of shares, at about US$10.20 per share. That means that even when the share price was higher than US$10.00 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months insiders purchased 457.32k shares for US$1.9m. But insiders sold 61.92k shares worth US$573k. In total, Core Scientific insiders bought more than they sold over the last year. Their average price was about US$4.17. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

Insiders At Core Scientific Have Bought Stock Recently

At Core Scientific,over the last quarter, we have observed quite a lot more insider buying than insider selling. In fact, two insiders bought US$671k worth of shares. But insiders only sold shares worth US$557k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Insider Ownership Of Core Scientific

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. Core Scientific insiders own 6.3% of the company, currently worth about US$162m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Core Scientific Insiders?

It's certainly positive to see the recent insider purchases. 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. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Core Scientific. Looks promising! 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. For example, Core Scientific has 2 warning signs (and 1 which is concerning) we think you should know about.

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 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.