Independent Director of CPS Technologies Picks Up 103% More Stock

Even if it's not a huge purchase, we think it was good to see that I. Cavoli, the Independent Director of CPS Technologies Corporation (NASDAQ:CPSH) recently shelled out US$75k to buy stock, at US$3.00 per share. While that isn't the hugest buy, it actually boosted their shareholding by 103%, which is good to see.

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CPS Technologies Insider Transactions Over The Last Year

Notably, that recent purchase by I. Cavoli is the biggest insider purchase of CPS Technologies shares that we've seen in the last year. Even though the purchase was made at a significantly lower price than the recent price (US$4.48), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While CPS Technologies insiders bought shares during the last year, they didn't sell. They paid about US$2.60 on average. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for CPS Technologies

CPS Technologies is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Does CPS Technologies Boast High Insider Ownership?

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. We usually like to see fairly high levels of insider ownership. Our data indicates that CPS Technologies insiders own about US$7.7m worth of shares (which is 11% of the company). But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The CPS Technologies Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that CPS Technologies insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CPS Technologies. Our analysis shows 4 warning signs for CPS Technologies (1 is concerning!) and we strongly recommend you look at them before investing.

But note: CPS Technologies 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.