Coventry Group independent non-executive chairman Neil Cathie buys 9.5% more shares

Even though it’s not a huge acquisition, we think it was good to see that Neil Cathie, the independent non-executive chairman of Coventry Group Ltd (ASX:CYG) recently paid $145,000 to buy shares at $1.45 per share. Although the acquisition is not a large one, increasing their shareholding by only 9.5%, it can be interpreted as a good sign.

See our latest review for Coventry Group

The last 12 months of insider trading at Coventry Group

In fact, Neil Cathie’s recent purchase was the largest purchase of Coventry Group shares by an insider in the past twelve months, according to our records. So it’s clear that an insider wanted to buy, even at a higher price than the current share price (being $1.39). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our opinion, the price an insider pays for shares is very important. It generally catches our attention when insiders have bought stocks at higher than current prices because it suggests they thought the stock was worth buying, even at a higher price.

Over the past twelve months, members within the Coventry Group have bought but not sold shares. The chart below shows insider trading (by companies and individuals) over the past year. If you want to know exactly who sold, for how much and when, simply click on the chart below!

There are plenty of other companies that have insiders buying stock. You probably do not I want you to miss this free of charge list of undervalued small cap companies that insiders are buying.

The property inside

Many investors like to check how much of a company is owned by insiders. Typically, the greater the insider ownership, the more likely insiders are incentivized to build the company for the long term. Our data suggests that Coventry Group insiders own 4.1% of the company, worth approximately $6.7 million. We consider this property quite low.

What can transactions within the Coventry Group tell us?

It is definitely positive to see the recent acquisitions from within. And long-term domestic transactions also give us confidence. While overall insider ownership levels are below what we would like to see, the transaction history implies that Coventry Group insiders are reasonably well aligned and optimistic about the future. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks a particular company faces. In terms of investment risks, I identified 2 warning signs with Coventry Group and understanding them should be part of your investment process.

The story continues

Of course, you might find a fantastic investment by looking elsewhere. So take a look at it free of charge list of interesting companies.

For the purposes of this article, insiders are those persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests, but not derivative transactions or indirect interests.

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This article from Simply Wall St is general in nature. We only provide commentary based on historical data and analyst forecasts using an unbiased methodology, and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. We aim to provide you with focused long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or quality materials. Simply Wall St has no position in any of the stocks mentioned.

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