Trade Alert: Independent Director Of SeaWorld Entertainment William Gray Has Sold Stock \

Some SeaWorld Entertainment, Inc. (NYSE:SEAS) shareholders may be a little concerned to see that the Independent Director, William Gray, recently sold a substantial US$1.2m worth of stock at a price of US$60.23 per share. That sale reduced their total holding by 40% which is hardly insignificant, but far from the worst we've seen.

View our latest analysis for SeaWorld Entertainment

The Last 12 Months Of Insider Transactions At SeaWorld Entertainment

The Chief Legal Officer, George Taylor, made the biggest insider sale in the last 12 months. That single transaction was for US$2.8m worth of shares at a price of US$53.04 each. That means that an insider was selling shares at slightly below the current price (US$58.62). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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. We note that the biggest single sale was only 32% of George Taylor's holding.

In the last twelve months insiders purchased 47.95k shares for US$2.5m. But insiders sold 96.98k shares worth US$5.4m. All up, insiders sold more shares in SeaWorld Entertainment than they bought, 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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Does SeaWorld Entertainment Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that SeaWorld Entertainment insiders own 0.9% of the company, worth about US$35m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About SeaWorld Entertainment Insiders?

Insiders sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, SeaWorld Entertainment makes money, and is growing profits. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 2 warning signs for SeaWorld Entertainment you should be aware of.

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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, but not derivative transactions.

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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.