In the last year, multiple insiders have substantially increased their holdings of Cleveland-Cliffs Inc. (NYSE:CLF) stock, indicating that insiders' optimism about the company's prospects has increased.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Cleveland-Cliffs
In the last twelve months, the biggest single purchase by an insider was when Chairman C. Goncalves bought US$1.0m worth of shares at a price of US$16.76 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$11.98). 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Over the last year, we can see that insiders have bought 161.45k shares worth US$2.7m. On the other hand they divested 42.50k shares, for US$668k. Overall, Cleveland-Cliffs insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Cleveland-Cliffs is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insider Ownership Of Cleveland-Cliffs
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Cleveland-Cliffs insiders own 1.8% of the company, currently worth about US$112m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Cleveland-Cliffs Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Cleveland-Cliffs insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cleveland-Cliffs. At Simply Wall St, we found 1 warning sign for Cleveland-Cliffs that deserve your attention before buying any shares.
But note: Cleveland-Cliffs may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.
