Insiders At Kimberly-Clark Sold US$6.3m In Stock, Alluding To Potential Weakness

In the last year, many Kimberly-Clark Corporation (NYSE:KMB) insiders sold a substantial stake in the company which may have sparked shareholders' attention. 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, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Kimberly-Clark

Kimberly-Clark Insider Transactions Over The Last Year

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. That means that even when the share price was below the current price of US$145, an insider wanted to cash in some shares. 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. This single sale was just 41% of Jeffrey Melucci's stake.

All up, insiders sold more shares in Kimberly-Clark 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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Kimberly-Clark Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Kimberly-Clark shares. In total, President of Latin American Consumer Business Gonzalo Uribe sold US$251k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.2% of Kimberly-Clark shares, worth about US$93m. 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 Does This Data Suggest About Kimberly-Clark Insiders?

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. On the plus side, Kimberly-Clark makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Kimberly-Clark. For example - Kimberly-Clark has 1 warning sign we think you should be aware of.

Of course Kimberly-Clark 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.