We wouldn’t blame Constellation Software Inc. (TSE:CSU) shareholders if they were a little worried about the fact that Jamal Baksh, the Chief Financial Officer recently netted about CA$3.8m selling shares at an average price of CA$1,250. That diminished their holding by a very significant 53%, which arguably implies a strong desire to reallocate capital.
The Last 12 Months Of Insider Transactions At Constellation Software
In fact, the recent sale by Jamal Baksh was the biggest sale of Constellation Software shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of CA$1,144. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. 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.
Over the last year, we can see that insiders have bought 2.56k shares worth CA$3.4m. On the other hand they divested 9516 shares, for CA$12m. All up, insiders sold more shares in Constellation Software 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 want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Constellation Software
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. Constellation Software insiders own 6.9% of the company, currently worth about CA$1.7b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Constellation Software Tell Us?
The stark truth for Constellation Software is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn’t bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Constellation Software. In terms of investment risks, we’ve identified 3 warning signs with Constellation Software and understanding them should be part of your investment process.
But note: Constellation Software 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.
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