Insiders At Crocs Sold US$11m In Stock, Alluding To Potential Weakness

Many Crocs, Inc. (NASDAQ:CROX) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Crocs

The Last 12 Months Of Insider Transactions At Crocs

The CEO & Director, Andrew Rees, made the biggest insider sale in the last 12 months. That single transaction was for US$2.6m worth of shares at a price of US$132 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$79.24. So it is hard to draw any strong conclusion from it.

Happily, we note that in the last year insiders paid US$2.4m for 22.43k shares. But they sold 99.63k shares for US$11m. All up, insiders sold more shares in Crocs than they bought, over the last year. 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!

I will like Crocs better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders At Crocs Have Sold Stock Recently

We've seen more insider selling than insider buying at Crocs recently. In that time, Executive VP & Brand President for Crocs Michelle Poole dumped US$1.4m worth of shares. On the flip side, insiders spent US$398k on purchasing shares. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.

Insider Ownership Of Crocs

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Crocs insiders own about US$162m worth of shares (which is 3.2% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Crocs Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at Crocs, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, Crocs makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing 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. In terms of investment risks, we've identified 2 warning signs with Crocs and understanding these should be part of your investment process.

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.