Trade Alert: The Director Of CubicFarm Systems Corp. (CVE:CUB), John De Jonge, Has Just Spent CA$76k Buying 2.2% More Shares

Whilst it may not be a huge deal, we thought it was good to see that the CubicFarm Systems Corp. (CVE:CUB) Director, John De Jonge, recently bought CA$76k worth of stock, for CA$0.69 per share. Although the purchase is not a big one, increasing their shareholding by only 2.2%, it can be interpreted as a good sign.

Check out our latest analysis for CubicFarm Systems

CubicFarm Systems Insider Transactions Over The Last Year

Notably, that recent purchase by John De Jonge is the biggest insider purchase of CubicFarm Systems shares that we've seen in the last year. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.67). 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

CubicFarm Systems insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around CA$0.58. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. You can see the insider transactions (by 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!

CubicFarm Systems is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership of CubicFarm Systems

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. CubicFarm Systems insiders own about CA$19m worth of shares. That equates to 24% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About CubicFarm Systems Insiders?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest CubicFarm Systems insiders are well aligned, and that they may think the share price is too low. While we like knowing 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. To that end, you should learn about the 4 warning signs we've spotted with CubicFarm Systems (including 2 which are significant).

But note: CubicFarm Systems 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, but not derivative transactions.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.