Have Insiders Been Selling Cadiz Inc. (NASDAQ:CDZI) Shares This Year?

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 before you buy or sell Cadiz Inc. (NASDAQ:CDZI), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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'.

View our latest analysis for Cadiz

Cadiz Insider Transactions Over The Last Year

The Lead Independent Director, Geoffrey Grant, made the biggest insider sale in the last 12 months. That single transaction was for US$403k worth of shares at a price of US$10.02 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$11.16. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 23% of Geoffrey Grant's holding. The only individual insider seller over the last year was Geoffrey Grant.

Geoffrey Grant sold a total of 50.00k shares over the year at an average price of US$10.02. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Cadiz 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. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Cadiz insiders own 2.4% of the company, worth about US$9.3m. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The Cadiz Insider Transactions Indicate?

The fact that there have been no Cadiz insider transactions recently certainly doesn't bother us. The insider transactions at Cadiz are not inspiring us to buy. And we're not picking up on high enough insider ownership to give us any comfort. 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, Cadiz has 5 warning signs (and 4 which can't be ignored) we think you should know about.

Of course Cadiz may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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, but not derivative transactions.

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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. 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.
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