Anyone interested in CompoSecure, Inc. (NASDAQ:CMPO) should probably be aware that the Chief Revenue Officer, Amanda Gourbault, recently divested US$158k worth of shares in the company, at an average price of US$10.98 each. However, the silver lining is that the sale only reduced their total holding by 4.0%, so we're hesitant to read anything much into it, on its own.
CompoSecure Insider Transactions Over The Last Year
Notably, that recent sale by Amanda Gourbault is the biggest insider sale of CompoSecure shares that we've seen in the last year. That means that an insider was selling shares at below the current price (US$11.02). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 4.0% of Amanda Gourbault's holding.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Insider Ownership
Many investors like to check how much of a company is owned by 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. CompoSecure insiders own about US$44m worth of shares. That equates to 4.9% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The CompoSecure Insider Transactions Indicate?
An insider hasn't bought CompoSecure stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But it is good to see that CompoSecure is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 5 warning signs for CompoSecure you should be aware of, and 2 of them shouldn't be ignored.
But note: CompoSecure 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.