Some Hillenbrand, Inc. (NYSE:HI) shareholders may be a little concerned to see that the Senior VP & President of Mold-Masters, Ling An-Heid, recently sold a substantial US$2.6m worth of stock at a price of US$47.67 per share. Probably the most concerning element of the whole transaction is that the disposal amounted to 99% of their entire holding.
Hillenbrand Insider Transactions Over The Last Year
In fact, the recent sale by Ling An-Heid was the biggest sale of Hillenbrand shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$48.40. 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 99% of Ling An-Heid's holding.
Happily, we note that in the last year insiders paid US$434k for 21.70k shares. On the other hand they divested 87.12k shares, for US$3.9m. Over the last year we saw more insider selling of Hillenbrand shares, than buying. The sellers received a price of around US$44.67, on average. We don't gain confidence from insider selling below the recent share price. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see the insider transactions (by companies and 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!
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Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Hillenbrand insiders own 0.8% of the company, worth about US$29m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Hillenbrand Tell Us?
An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 5 warning signs for Hillenbrand you should know about.
Of course Hillenbrand 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, but not derivative transactions.
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