Insiders At Kimberly-Clark Sold US$5.3m In Stock, Alluding To Potential Weakness

Over the past year, many Kimberly-Clark Corporation (NYSE:KMB) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Kimberly-Clark

The Last 12 Months Of Insider Transactions At Kimberly-Clark

In the last twelve months, the biggest single sale by an insider was when the Chief Business & Transformation Officer, Jeffrey Melucci, sold US$1.9m worth of shares at a price of US$136 per share. So we know that an insider sold shares at around the present share price of US$131. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

In total, Kimberly-Clark insiders sold more 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!

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Kimberly-Clark Insiders Are Selling The Stock

The last three months saw significant insider selling at Kimberly-Clark. Specifically, insider Andrew Drexler ditched US$417k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Kimberly-Clark

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that Kimberly-Clark insiders own 0.2% of the company, worth about US$65m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Kimberly-Clark Tell Us?

An insider sold Kimberly-Clark shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. But since Kimberly-Clark is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Kimberly-Clark that deserve your attention before buying any shares.

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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 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.