Read This Before Buying Century Aluminum Company (NASDAQ:CENX) Shares

By
Simply Wall St
Published
July 01, 2021
NasdaqGS:CENX
Source: Shutterstock

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Century Aluminum Company (NASDAQ:CENX).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.

Check out our latest analysis for Century Aluminum

The Last 12 Months Of Insider Transactions At Century Aluminum

Over the last year, we can see that the biggest insider sale was by the President, Michael Bless, for US$822k worth of shares, at about US$15.22 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$12.89. So it may not shed much light on insider confidence at current levels.

Insiders in Century Aluminum didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and 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!

insider-trading-volume
NasdaqGS:CENX Insider Trading Volume July 1st 2021

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Century Aluminum Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Century Aluminum insiders own 0.7% of the company, worth about US$8.5m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Century Aluminum Insiders?

The fact that there have been no Century Aluminum insider transactions recently certainly doesn't bother us. Our analysis of Century Aluminum insider transactions leaves us unenthusiastic. And usually insiders own more stock in the company, according to our data. 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 Century Aluminum you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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