Grand Canyon Education Insiders Sell US$3.2m Of Stock, Possibly Signalling Caution

Over the past year, many Grand Canyon Education, Inc. (NASDAQ:LOPE) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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.

Check out our latest analysis for Grand Canyon Education

The Last 12 Months Of Insider Transactions At Grand Canyon Education

In the last twelve months, the biggest single sale by an insider was when the Chairman & CEO, Brian Mueller, sold US$1.3m worth of shares at a price of US$171 per share. That means that an insider was selling shares at slightly below the current price (US$184). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 2.5% of Brian Mueller's holding.

Insiders in Grand Canyon Education didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Grand Canyon Education 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.

Grand Canyon Education Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Grand Canyon Education shares. Specifically, Independent Director Jack Henry ditched US$253k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Grand Canyon Education insiders own about US$115m worth of shares (which is 2.2% of the company). 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 Grand Canyon Education Tell Us?

An insider 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 it is good to see that Grand Canyon Education is growing earnings. 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. Of course, the future is what matters most. So if you are interested in Grand Canyon Education, you should check out this free report on analyst forecasts for the company.

Of course Grand Canyon Education may not be the best stock to buy. So you may wish to see this free collection of high quality 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.