Don't Ignore The Insider Selling In Kadant

We wouldn't blame Kadant Inc. (NYSE:KAI) shareholders if they were a little worried about the fact that Michael McKenney, the Executive VP & CFO recently netted about US$1.7m selling shares at an average price of US$318. That's a big disposal, and it decreased their holding size by 23%, which is notable but not too bad.

Check out our latest analysis for Kadant

The Last 12 Months Of Insider Transactions At Kadant

In the last twelve months, the biggest single sale by an insider was when the Chairman of the Board, Jonathan Painter, sold US$2.3m worth of shares at a price of US$334 per share. So we know that an insider sold shares at around the present share price of US$321. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

In the last year Kadant insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insider Ownership

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. It appears that Kadant insiders own 1.3% of the company, worth about US$48m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Kadant Tell Us?

Insiders sold Kadant shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Kadant makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - Kadant has 1 warning sign we think you should be aware of.

Of course Kadant 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.