Favorable turn of events for Casa Systems, Inc. (NASDAQ:CASA) insiders who've lost US$55k to date on a US$580k purchase

Insiders who bought US$580k worth of Casa Systems, Inc. (NASDAQ:CASA) stock in the last year recovered part of their losses as the stock rose by 17% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$55k.

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

View our latest analysis for Casa Systems

The Last 12 Months Of Insider Transactions At Casa Systems

Over the last year, we can see that the biggest insider purchase was by Independent Director William Styslinger for US$533k worth of shares, at about US$4.38 per share. That means that an insider was happy to buy shares at above the current price of US$3.73. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. William Styslinger was the only individual insider to buy shares in the last twelve months.

William Styslinger bought a total of 140.72k shares over the year at an average price of US$4.12. 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 always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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. Casa Systems insiders own about US$64m worth of shares. That equates to 18% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Casa Systems Insiders?

The fact that there have been no Casa Systems insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Casa Systems insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Casa Systems. Our analysis shows 2 warning signs for Casa Systems (1 makes us a bit uncomfortable!) and we strongly recommend you look at these before investing.

But note: Casa Systems 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, but not derivative transactions.

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

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.

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