Last week, Cadiz Inc. (NASDAQ:CDZI) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 19% last week, resulting in a US$59m increase in the company's market worth, implying a 109% gain on their initial purchase. As a result, their original purchase of US$75.2k worth of stock is now worth US$157.2k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Cadiz Insider Transactions Over The Last Year

The CEO & Chairman Susan Kennedy made the biggest insider purchase in the last 12 months. That single transaction was for US$56k worth of shares at a price of US$2.25 each. We do like to see buying, but this purchase was made at well below the current price of US$4.95. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Susan Kennedy bought 31.76k shares over the last 12 months at an average price of US$2.37. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Does Cadiz Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Cadiz insiders have about 1.3% of the stock, worth approximately US$4.5m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We prefer to see high levels of insider ownership.

So What Do The Cadiz Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Cadiz shares in the last quarter. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Cadiz insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cadiz. At Simply Wall St, we found 3 warning signs for Cadiz that deserve your attention before buying any shares.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.