Insiders Buying Cadiz Might Wish They Invested More, Stock Gains 12%

Insiders who bought Cadiz Inc. (NASDAQ:CDZI) stock in the last 12 months were richly rewarded last week. The company's market value increased by US$40m as a result of the stock's 12% gain over the same period. As a result, the stock they originally bought for US$56.3k is now worth US$123.5k.

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

See our latest analysis for Cadiz

The Last 12 Months Of Insider Transactions At Cadiz

The CEO & Chairman Susan Kennedy made the biggest insider purchase in the last 12 months. That single transaction was for US$56k worth of shares at a price of US$2.25 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$4.94. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Cadiz insiders have about 1.3% of the stock, worth approximately US$4.9m. But they may have an indirect interest through a corporate structure that we haven't picked up on. I generally like to see higher levels of ownership.

So What Do The Cadiz Insider Transactions Indicate?

The fact that there have been no Cadiz insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Cadiz insiders bought more shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Cadiz has 2 warning signs we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.