Don't Ignore The Insider Selling In Clean Harbors

Some Clean Harbors, Inc. (NYSE:CLH) shareholders may be a little concerned to see that the Co-CEO, Co-President & Director, Eric Gerstenberg, recently sold a substantial US$1.5m worth of stock at a price of US$250 per share. However, that sale only accounted for 9.8% of their holding, so arguably it doesn't say much about their conviction.

View our latest analysis for Clean Harbors

The Last 12 Months Of Insider Transactions At Clean Harbors

Over the last year, we can see that the biggest insider sale was by the Founder, Alan McKim, for US$13m worth of shares, at about US$184 per share. That means that an insider was selling shares at slightly below the current price (US$247). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. It is worth noting that this sale was only 2.5% of Alan McKim's holding.

Clean Harbors insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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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. We usually like to see fairly high levels of insider ownership. It's great to see that Clean Harbors insiders own 6.0% of the company, worth about US$800m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Clean Harbors Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since Clean Harbors is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Clean Harbors. Every company has risks, and we've spotted 2 warning signs for Clean Harbors you should know about.

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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.