Checkit plc (LON:CKT) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 16%, resulting in a UK£3.2m rise in the company's market capitalisation, translating to a gain of 25% on their initial investment. As a result, their original purchase of UK£297.0k worth of stock is now worth UK£371.0k.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Checkit Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider John Wilson bought UK£64k worth of shares at a price of UK£0.19 per share. We do like to see buying, but this purchase was made at well below the current price of UK£0.21. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Checkit insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Check out our latest analysis for Checkit
Checkit is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Checkit insiders own about UK£7.8m worth of shares. That equates to 33% 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.
What Might The Insider Transactions At Checkit Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Checkit insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for Checkit (of which 1 is concerning!) you should know about.
Of course Checkit 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.