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As Cochlear Limited (ASX:COH) hits AU$16b market cap, insiders may be dismayed about not purchasing higher quantities

Last week, Cochlear Limited (ASX:COH) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 3.7% last week, resulting in a AU$571m increase in the company's market worth. In other words, the original AU$474k purchase is now worth AU$557k.

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.

View our latest analysis for Cochlear

The Last 12 Months Of Insider Transactions At Cochlear

The Non-Executive Independent Director Karen Lee Penrose made the biggest insider purchase in the last 12 months. That single transaction was for AU$100k worth of shares at a price of AU$219 each. We do like to see buying, but this purchase was made at well below the current price of AU$246. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

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While Cochlear insiders bought shares during the last year, they didn't sell. 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!

insider-trading-volume
insider-trading-volume

Cochlear is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders At Cochlear Have Bought Stock Recently

There was some insider buying at Cochlear over the last quarter. Independent Non-Executive Director Michael J. Del Prado bought AU$30k worth of shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does Cochlear Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Cochlear insiders own about AU$65m worth of shares. That equates to 0.4% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Cochlear Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Cochlear insiders are doubting the company, and they do own shares. Of course, the future is what matters most. So if you are interested in Cochlear, you should check out this free report on analyst forecasts for the company.

Of course Cochlear 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.

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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