Insiders At CCL Industries Sold CA$14m In Stock, Alluding To Potential Weakness

Many CCL Industries Inc. (TSE:CCL.B) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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CCL Industries Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Senior Vice President of Finance, Lalitha Vaidyanathan, sold CA$3.1m worth of shares at a price of CA$81.07 per share. That means that an insider was selling shares at around the current price of CA$79.12. While we don't usually like to see insider selling, it's more concerning if the sales take place 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.

In the last year CCL Industries insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for CCL Industries

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CCL Industries Insiders Are Selling The Stock

The last quarter saw substantial insider selling of CCL Industries shares. Specifically, insiders ditched CA$8.1m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.9% of CCL Industries shares, worth about CA$123m. 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 CCL Industries Insider Transactions Indicate?

Insiders haven't bought CCL Industries stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. On the plus side, CCL Industries makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. Every company has risks, and we've spotted 1 warning sign for CCL Industries you should know about.

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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.

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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.