Possible Bearish Signals With Celestica Insiders Disposing Stock

Many Celestica Inc. (TSE:CLS) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Celestica

The Last 12 Months Of Insider Transactions At Celestica

Over the last year, we can see that the biggest insider sale was by the President of Connectivity & Cloud Solutions, Jason Phillips, for CA$2.1m worth of shares, at about CA$34.38 per share. That means that even when the share price was below the current price of CA$70.23, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 38% of Jason Phillips's holding.

Insiders in Celestica didn't buy any shares in the last year. You can see the insider transactions (by companies and 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!

I will like Celestica better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Celestica Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Celestica. Specifically, Chief Human Resources Officer Leila Wong ditched CA$127k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Celestica insiders own 1.0% of the company, worth about CA$80m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Celestica Insider Transactions Indicate?

An insider sold Celestica shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. On the plus side, Celestica makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! Of course, the future is what matters most. So if you are interested in Celestica, you should check out this free report on analyst forecasts for the company.

Of course Celestica may not be the best stock to buy. So you may wish to see this free collection of high quality 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 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.