Some Darling Ingredients Inc. (NYSE:DAR) shareholders may be a little concerned to see that the Chairman & CEO, Randall Stuewe, recently sold a whopping US$1.3m worth of stock at a price of US$25.94 per share. However, it’s crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 5.0%.
Darling Ingredients Insider Transactions Over The Last Year
In fact, the recent sale by Chairman & CEO Randall Stuewe was not their only sale of Darling Ingredients shares this year. They previously made an even bigger sale of -US$1.4m worth of shares at a price of US$21.02 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$26.60. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it’s only a weak signal. It is worth noting that this sale was only 8.8% of Randall Stuewe’s holding.
Randall Stuewe sold a total of 118940 shares over the year at an average price of US$23.09. 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!
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Does Darling Ingredients Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Darling Ingredients insiders own 1.6% of the company, worth about US$68m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Darling Ingredients Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at Darling Ingredients, in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. On the plus side, Darling Ingredients makes money, and is growing profits. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’re in no rush to buy! In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Darling Ingredients. To that end, you should learn about the 2 warning signs we’ve spotted with Darling Ingredients (including 1 which makes us a bit uncomfortable).
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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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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.
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