Yahoo Finance Trade Alert: Hoi Shuen Chau At ChromaDex Corporation (NASDAQ:CDXC), Has Just Spent US$100k Buying A Small Number of Shares
Even if it's not a huge purchase, we think it was good to see that Hoi Shuen Chau, a ChromaDex Corporation (NASDAQ:CDXC) insider, recently shelled out US$100k to buy stock, at US$1.66 per share. Nevertheless, it only increased their shareholding by a minuscule percentage, and it wasn't a massive purchase by absolute value, either.
Check out our latest analysis for ChromaDex
ChromaDex Insider Transactions Over The Last Year
Notably, that recent purchase by insider Hoi Shuen Chau was not the only time they bought ChromaDex shares this year. Earlier in the year, they paid US$6.45 per share in a US$2.2m purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$1.84). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While ChromaDex insiders bought shares during the last year, they didn't sell. Their average price was about US$5.35. I'd consider this a positive as it suggests insiders see value at around the current price. 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!
ChromaDex is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. ChromaDex insiders own about US$22m worth of shares. That equates to 17% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About ChromaDex Insiders?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of ChromaDex 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. In terms of investment risks, we've identified 2 warning signs with ChromaDex and understanding these should be part of your investment process.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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, but not derivative transactions.
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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.
