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 before you buy or sell Kaiser Aluminum Corporation (NASDAQ:KALU), you may well want to know whether insiders have been buying or selling.
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, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Kaiser Aluminum
In the last twelve months, the biggest single sale by an insider was when the VP of Investor Relations & Corporate Communications, Melinda Ellsworth, sold US$105k worth of shares at a price of US$95.36 per share. So we know that an insider sold shares at around the present share price of US$90.98. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
We note that in the last year insiders divested 3200 shares for a total of US$303k. Kaiser Aluminum insiders didn’t buy any shares over the last year. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Kaiser Aluminum Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at Kaiser Aluminum. In total, Independent Director Carolyn Bartholomew sold US$95k 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.
Does Kaiser Aluminum Boast High Insider Ownership?
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 2.5% of Kaiser Aluminum shares, worth about US$36m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Kaiser Aluminum Insider Transactions Indicate?
An insider sold Kaiser Aluminum shares recently, but they didn’t buy any. Looking to the last twelve months, our data doesn’t show any insider buying. But since Kaiser Aluminum 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. We’re in no rush to buy! Of course, the future is what matters most. So if you are interested in Kaiser Aluminum, you should check out this free report on analyst forecasts for the company.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.