We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Charah Solutions, Inc. (NYSE:CHRA).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
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. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Charah Solutions Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, Charles Price, sold US$3.0m worth of shares at a price of US$3.00 per share. That means that an insider was selling shares at slightly below the current price (US$4.69). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 25% of Charles Price's holding. Charles Price was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid US$22k for 7.50k shares. On the other hand they divested 1.41m shares, for US$3.8m. Charles Price sold a total of 1.41m shares over the year at an average price of US$2.71. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Charah Solutions Insiders Bought Stock Recently
There was some insider buying at Charah Solutions over the last quarter. Insiders purchased US$22k worth of shares in that period. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 8.3% of Charah Solutions shares, worth about US$10m. 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 Charah Solutions Insider Transactions Indicate?
We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. Still, the insider transactions at Charah Solutions in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Charah Solutions.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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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