We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), you may well want to know whether insiders have been buying or selling.
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Cracker Barrel Old Country Store Insider Transactions Over The Last Year
The Senior Vice President of Restaurant & Retail Operations, Nicholas Flanagan, made the biggest insider sale in the last 12 months. That single transaction was for US$728k worth of shares at a price of US$146 each. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$159. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it’s only a weak signal. This single sale was just 29.2% of Nicholas Flanagan’s stake.
In the last twelve months insiders netted US$1.1m for 7731 shares sold. In the last year Cracker Barrel Old Country Store insiders didn’t buy any company stock. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Cracker Barrel Old Country Store Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 1.0% of Cracker Barrel Old Country Store shares, worth about US$39m. 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 Cracker Barrel Old Country Store Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Cracker Barrel Old Country Store shares in the last quarter. We don’t take much encouragement from the transactions by Cracker Barrel Old Country Store insiders. But it’s good to see that insiders own shares in the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Cracker Barrel Old Country Store may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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