Even if it's not a huge purchase, we think it was good to see that Susan Kennedy, the CEO & Chairman of Cadiz Inc. (NASDAQ:CDZI) recently shelled out US$56k to buy stock, at US$2.25 per share. Although the purchase is not a big one, increasing their shareholding by only 7.9%, it can be interpreted as a good sign.
Cadiz Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Maria Jelescu-Dreyfus for US$350k worth of shares, at about US$3.50 per share. That means that an insider was happy to buy shares at above the current price of US$2.25. 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.
Cadiz insiders may have bought shares in the last year, but they didn't sell any. 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!
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.
Does Cadiz Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data suggests Cadiz insiders own 1.9% of the company, worth about US$2.8m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Cadiz Tell Us?
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Cadiz insiders are expecting a bright future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Cadiz is showing 2 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable...
Of course Cadiz 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 of direct interests only, but not derivative transactions or indirect interests.
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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.