Those who follow with COG Financial Services Limited (ASX: COG) will no doubt be intrigued by the recent share purchase by Cameron McCullagh, executive director and head of financial brokerage and aggregation of the company, who spent AU $ 4.1 million on shares at an average price of 1.35 Australian dollars. It is undeniable that a purchase of this magnitude suggests a belief in a better future, although we note that proportionately this only increased their stake by 9.1%.
The last 12 months of insider trading at COG Financial Services
Notably, this recent buy by Cameron McCullagh is the biggest insider buy of COG Financial Services shares we’ve seen in the past year. This means that even when the stock price was above AUD 1.34 (the recent price), an insider wanted to buy stocks. Their perspective may have changed since, but it at least shows that they were feeling optimistic back then. We always take careful note of the price insiders pay when they buy stocks. Generally speaking, this comes to our attention when an insider bought shares at prices higher than current prices, as it suggests that they thought the shares were worth buying, even at a higher price. Cameron McCullagh was the only individual insider to buy in the past year. Notably, Cameron McCullagh was also the biggest seller.
Cameron McCullagh has bought 4.91 million shares in the past 12 months at an average price of AU $ 1.28. The chart below shows insider trading (by businesses and individuals) over the past year. If you click on the chart, you can see all of the individual trades including the stock price, individual and date!
COG Financial Services isn’t the only stock that insiders buy. For those who like to find winning investments this free list of growing companies with recent insider buys, might be just the ticket.
Another way to test the alignment between a company’s executives and other shareholders is to look at how many shares they own. I think it’s a good sign if the insiders own a significant number of shares in the company. It appears that COG Financial Services insiders own 21% of the company, worth around A $ 53 million. This level of insider ownership is good but just short of being particularly noteworthy. It certainly suggests a reasonable degree of alignment.
So what does this data suggest about COG’s financial services insiders?
It’s certainly positive to see the recent insider buy. And longer-term insider trading gives us confidence as well. But on the other hand, the company has made a loss over the past year, which makes us a little cautious. Insiders likely see value in shares of COG Financial Services, given these transactions (as well as the company’s notable insider ownership). In addition to knowing the current insider transactions, it is useful to identify the risks facing COG Financial Services. When we did our research we found 3 warning signs for COG Financial Services (1 is potentially serious!) Which we believe deserves your full attention.
But beware : COG Financial Services may not be the best stock to buy. So take a look at this free list of interesting companies with high ROE and low debt.
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 assignments, but not derivative transactions.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.