Selling US$1.5m Of Stock Was Lucrative Decision For Coda Octopus Group Insiders

While Coda Octopus Group, Inc. (NASDAQ:CODA) shareholders have enjoyed a good week with stock up 12%, they need remain vigilant. The fact that insiders chose to dispose of US$1.5m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Coda Octopus Group

The Last 12 Months Of Insider Transactions At Coda Octopus Group

The Independent Director, G. Runnels, made the biggest insider sale in the last 12 months. That single transaction was for US$1.5m worth of shares at a price of US$6.03 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$7.32. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 29% of G. Runnels's holding. The only individual insider seller over the last year was G. Runnels.

Over the last year, we can see that insiders have bought 183.08k shares worth US$1.1m. But they sold 250.00k shares for US$1.5m. 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!

I will like Coda Octopus Group better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Coda Octopus Group

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Coda Octopus Group insiders own about US$36m worth of shares (which is 45% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Coda Octopus Group Insider Transactions Indicate?

The fact that there have been no Coda Octopus Group insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Coda Octopus Group insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Coda Octopus Group. At Simply Wall St, we found 2 warning signs for Coda Octopus Group that deserve your attention before buying any shares.

But note: Coda Octopus Group 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com