Crocs Insiders Sell US$14m Of Stock, Possibly Signalling Caution

In the last year, many Crocs, Inc. (NASDAQ:CROX) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Crocs

The Last 12 Months Of Insider Transactions At Crocs

The Independent Director, Ian Bickley, made the biggest insider sale in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$121 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$104. So it may not tell us anything about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid US$849k for 7.21k shares. But they sold 105.89k shares for US$14m. All up, insiders sold more shares in Crocs than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Crocs better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Crocs Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Crocs. Not only was there no selling that we can see, but they collectively bought US$352k worth of shares. This is a positive in our book as it implies some confidence.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Crocs insiders own 3.3% of the company, currently worth about US$206m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Crocs Tell Us?

It's certainly positive to see the recent insider purchases. On the other hand the transaction history, over the last year, isn't so positive. The recent buying by some insiders , along with high insider ownership, suggest that Crocs insiders are fairly aligned, and optimistic. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Crocs. For instance, we've identified 2 warning signs for Crocs (1 is concerning) you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.