CoStar Group, Inc. (NASDAQ:CSGP) shareholders (or potential shareholders) will be happy to see that the President, Andrew Florance, recently bought a whopping US$2.5m worth of stock, at a price of US$35.20. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 5.0%.

The Last 12 Months Of Insider Transactions At CoStar Group

In fact, the recent purchase by Andrew Florance was the biggest purchase of CoStar Group shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$34.07). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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.

Happily, we note that in the last year insiders paid US$6.0m for 149.15k shares. But insiders sold 81.12k shares worth US$7.1m. All up, insiders sold more shares in CoStar Group than they bought, over the last year. The average sell price was around US$87.35. We are not joyful about insider selling. However, we do note that the average sale price was significantly higher than the current share price (which is US$34.07). You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership Of CoStar Group

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. CoStar Group insiders own 1.3% of the company, currently worth about US$179m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The CoStar Group Insider Transactions Indicate?

It is good to see recent purchasing. However, the longer term transactions are not so encouraging. Overall, we'd prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, CoStar Group insiders are reasonably well aligned, and optimistic for the future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing.

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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.

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.