As Calgro M3 Holdings Limited (JSE:CGR) hits R347m market cap, insiders may be dismayed about not purchasing higher quantities

By
Simply Wall St
Published
September 27, 2021
JSE:CGR
Source: Shutterstock

Insiders who bought Calgro M3 Holdings Limited (JSE:CGR) stock in the last 12 months were richly rewarded last week. The company's market value increased by R39m as a result of the stock's 13% gain over the same period. As a result, their original purchase of R1.6m worth of stock is now worth R2.1m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Calgro M3 Holdings

The Last 12 Months Of Insider Transactions At Calgro M3 Holdings

Over the last year, we can see that the biggest insider purchase was by Executive Director Wayne Williams for R1.4m worth of shares, at about R2.13 per share. Even though the purchase was made at a significantly lower price than the recent price (R2.86), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Wayne Williams bought a total of 732.28k shares over the year at an average price of R2.14. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
JSE:CGR Insider Trading Volume September 28th 2021

Calgro M3 Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of Calgro M3 Holdings

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Calgro M3 Holdings insiders own about R123m worth of shares. That equates to 36% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Calgro M3 Holdings Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Calgro M3 Holdings insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Calgro M3 Holdings. When we did our research, we found 4 warning signs for Calgro M3 Holdings (2 make us uncomfortable!) that we believe deserve your full attention.

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, but not derivative transactions.

If you're looking to trade Calgro M3 Holdings, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.Promoted

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.