It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Primerica, Inc. (NYSE:PRI).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Primerica Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Chief Executive Officer of PFS Investments Inc. William Kelly for US$614k worth of shares, at about US$123 per share. That means that an insider was selling shares at around the current price of US$122. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
In total, Primerica insiders sold more than they bought over the last year. They sold for an average price of about US$123. It’s not particularly great to see insiders were selling shares at below recent prices. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Primerica better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Primerica Have Sold Stock Recently
The last three months saw significant insider selling at Primerica. In total, insiders dumped US$1.1m 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.
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 0.6% of Primerica shares, worth about US$32m. 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 Primerica Insiders?
Insiders haven’t bought Primerica stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn’t bring confidence, either. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’d think twice before buying! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Primerica.
Of course Primerica may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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