We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Clarkson PLC (LON:CKN), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Clarkson Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Senior Advisor of Banking & Broking, Peter Anker, for UK£2.0m worth of shares, at about UK£27.50 per share. So we know that an insider sold shares at around the present share price of UK£23.70. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it’s not too bad (but it’s still not a positive).
Happily, we note that in the last year insiders paid UK£257k for 10746 shares. But they sold 243k for UK£6.6m. In total, Clarkson 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. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Clarkson better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Clarkson Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Clarkson. In total, insiders bought UK£145k worth of shares in that time, and we didn’t record any sales whatsoever. This is a positive in our book as it implies some confidence.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 2.8% of Clarkson shares, worth about UK£20m. 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 Clarkson Insider Transactions Indicate?
It’s certainly positive to see the recent insider purchases. But we can’t say the same for the transactions over the last 12 months. The more recent transactions are a positive, but Clarkson 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. Of course, the future is what matters most. So if you are interested in Clarkson, you should check out this free report on analyst forecasts for the company.
But note: Clarkson 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.
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