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Have Insiders Been Buying Cromwell Property Group (ASX:CMW) Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Cromwell Property Group (ASX:CMW).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

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Check out our latest analysis for Cromwell Property Group

The Last 12 Months Of Insider Transactions At Cromwell Property Group

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Chairman of the Board Geoffrey Levy bought AU$502k worth of shares at a price of AU$0.98 per share. So it's clear an insider wanted to buy, at around the current price, which is AU$1.21. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Cromwell Property Group insiders decided to buy shares at close to current prices.

Happily, we note that in the last year insiders paid AU$1.5m for 1.5m shares. But insiders sold 200k shares worth AU$200k. In total, Cromwell Property Group insiders bought more than they sold over the last year. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

ASX:CMW Recent Insider Trading, August 5th 2019
ASX:CMW Recent Insider Trading, August 5th 2019

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

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Cromwell Property Group insiders own 1.3% of the company, worth about AU$41m. 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 Cromwell Property Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Cromwell Property Group shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Cromwell Property Group and their transactions don't cause us concern. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.