Market cap

As Catapult Group International Limited’s (ASX:CAT) market cap drops to A$221 million, insiders may question their decision to buy earlier this year

Insiders who bought $1.5 million worth of Catapult Group International Limited (ASX:CAT) at an average buy price of $1.62 over the past year may be disappointed with the stock’s recent 13% decline. Insiders invest in the hope that their money will increase in value over time. However, following recent losses, their initial investment is now only worth US$928,000, which is not what they expected.

While we don’t think shareholders should simply follow insider trading, we think it makes perfect sense to keep tabs on what insiders are doing.

Check out our latest analysis for Catapult Group International

The last 12 months of insider trading at Catapult Group International

Over the past year, we can see that the biggest insider buy was made by independent non-executive director Michelle Guthrie for A$799,000 worth of shares, at around A$1.90 per share. This means that even when the stock price was above AU$0.98 (the recent price), an insider wanted to buy some stock. Their perspective may have changed since then, but it at least shows that they were feeling optimistic at the time. For us, it is very important to consider the price that insiders pay for the shares. Generally speaking, it comes to our attention when insiders have bought stocks at higher prices than they are now, as it suggests that they thought the stock was worth buying, even at a higher price.

Catapult Group International insiders may have bought shares in the past year, but they haven’t sold any. Their average price was around AU$1.62. These trades suggest that insiders found the current price attractive. You can see insider trading (by companies and individuals) over the past year illustrated in the table below. If you click on the chart, you can see all individual trades including stock price, individual and date!

ASX:CAT Insider Trading Volume May 27, 2022

There are many other companies whose insiders buy shares. You probably do not want to miss this free list of growing companies insiders are buying.

Does Catapult Group International boast of high insider ownership?

Many investors like to check how much a company is owned by insiders. High insider participation often makes company management more concerned with the interests of shareholders. Insiders of Catapult Group International hold approximately A$46 million worth of shares. This equals 21% of the business. We have certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest an alignment between insiders and other shareholders.

So what do Catapult Group’s international insider trading indicate?

The fact that there have been no Catapult Group International insider trading recently certainly doesn’t bother us. However, our analysis of transactions over the past year is encouraging. Insiders have a stake in Catapult Group International and their transactions are of no concern to us. While we like to know what’s going on with insider ownership and trading, we also make sure to consider the risks a stock faces before making any investment decisions. Every business has risks, and we’ve spotted 4 warning signs for Catapult Group International (1 of which can’t be ignored!) that you should know about.

If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of attractive companies, which have a high return on equity and low debt.

For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.