[ad_1]
Even if it’s not a huge purchase, we think it was good to see that Jonathan Kelly, the Independent Director of Culp, Inc. (NYSE:CULP) recently shelled out US$80k to buy stock, at US$4.67 per share. Even though that isn’t a massive buy, it did increase their holding by 232%, which is arguably a good sign.
See our latest analysis for Culp
Culp Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Fred Jackson bought US$103k worth of shares at a price of US$10.31 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$4.88). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While Culp insiders bought shares during the last year, they didn’t sell. Their average price was about US$6.69. I’d consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart 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 growing companies that insiders are buying.
Insider Ownership of Culp
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Our data indicates that Culp insiders own about US$3.2m worth of shares (which is 5.4% of the company). Whilst better than nothing, we’re not overly impressed by these holdings.
So What Do The Culp Insider Transactions Indicate?
It’s certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Culp insiders are expecting a bright future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. For example, Culp has 2 warning signs (and 1 which is concerning) we think you should know about.
Of course Culp 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, but not derivative transactions.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
[ad_2]
Source link
