Possible Turnaround For COG Financial Services Insiders, Still Down AU$138k

Simply Wall St · 10/16 20:24

Insiders who purchased AU$1.12m worth of COG Financial Services Limited (ASX:COG) shares over the past year recouped some of their losses after price gained 16% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at AU$138k since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for COG Financial Services

COG Financial Services Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Executive Director and Head of Finance Broking & Aggregation Cameron McCullagh for AU$378k worth of shares, at about AU$1.39 per share. That means that even when the share price was higher than AU$1.10 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

COG Financial Services insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$1.25. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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ASX:COG Insider Trading Volume October 16th 2024

COG Financial Services is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

COG Financial Services Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at COG Financial Services. Overall, four insiders shelled out AU$294k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.

Does COG Financial Services Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 26% of COG Financial Services shares, worth about AU$53m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The COG Financial Services Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of COG Financial Services we think they are probably pretty confident of a bright 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 that a particular company is facing. Be aware that COG Financial Services is showing 3 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...

Of course COG Financial Services 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.