This Insider Has Just Sold Shares In The Coca-Cola Company (NYSE:KO)

We wouldn't blame The Coca-Cola Company (NYSE:KO) shareholders if they were a little worried about the fact that Brian Smith, the President & COO recently netted about US$3.0m selling shares at an average price of US$61.66. That sale reduced their total holding by 24% which is hardly insignificant, but far from the worst we've seen.

View our latest analysis for Coca-Cola

Coca-Cola Insider Transactions Over The Last Year

The Chairman & CEO, James Robert Quincey, made the biggest insider sale in the last 12 months. That single transaction was for US$6.0m worth of shares at a price of US$54.48 each. That means that an insider was selling shares at slightly below the current price (US$61.97). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 26% of James Robert Quincey's holding.

Coca-Cola insiders didn't buy any shares 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Does Coca-Cola 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Coca-Cola insiders own about US$1.7b worth of shares (which is 0.6% 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.

So What Do The Coca-Cola Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But since Coca-Cola is profitable and growing, we're not too worried by this. 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. 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. Every company has risks, and we've spotted 2 warning signs for Coca-Cola you should know about.

But note: Coca-Cola 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.

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.