Insiders who bought UK£470k worth of Cornerstone FS plc's (LON:CSFS) stock at an average buy price of UK£0.11 over the last year may be disappointed by the recent 18% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth UK£314k, which is not what they expected.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Cornerstone FS Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Robert O'Brien for UK£429k worth of shares, at about UK£0.10 per share. That means that even when the share price was higher than UK£0.07 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months Cornerstone FS insiders were buying shares, but not selling. 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!
Cornerstone FS 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.
Insiders At Cornerstone FS Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Cornerstone FS. insider Robert O'Brien spent UK£429k on stock, and there wasn't any selling. That shows some optimism about the company's future.
Insider Ownership Of Cornerstone FS
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. Cornerstone FS insiders own 56% of the company, currently worth about UK£1.7m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Cornerstone FS Tell Us?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Cornerstone FS. Looks promising! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cornerstone FS. To that end, you should learn about the 5 warning signs we've spotted with Cornerstone FS (including 4 which are potentially serious).
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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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.
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