We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Crane Co. (NYSE:CR), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Crane
The Vice President of CBS, James Lavish, made the biggest insider sale in the last 12 months. That single transaction was for US$437k worth of shares at a price of US$84.94 each. That means that an insider was selling shares at around the current price of US$78.20. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn’t a major concern, though it’s hardly a good sign.
Happily, we note that in the last year insiders paid US$336k for 4202 shares. But they sold 13200 for US$1.2m. In total, Crane insiders sold more than they bought over the last year. 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!
Insiders at Crane Have Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at Crane. We can see that insider Mario Gabelli paid US$120k for shares in the company. But James Lavish sold shares worth US$56k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Does Crane Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Crane insiders own 1.8% of the company, worth about US$87m. 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 Do The Crane Insider Transactions Indicate?
It’s certainly positive to see the recent insider purchase. However, the longer term transactions are not so encouraging. The more recent transactions are a positive, but Crane insiders haven’t shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. In short they are likely aligned with shareholders. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Crane.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.