We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Silgan Holdings Inc. (NASDAQ:SLGN), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Silgan Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the CEO & Chairman of the Board, Anthony Allott, sold US$1.8m worth of shares at a price of US$28.62 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$30.47. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don’t know for sure what they think of the stock price. We note that the biggest single sale was only 14.2% of Anthony Allott’s holding.
Over the last year, we can see that insiders have bought 12500 shares worth US$324k. But insiders sold 189k shares worth US$5.1m. All up, insiders sold more shares in Silgan Holdings than they bought, over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Silgan Holdings 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 Silgan Holdings Have Sold Stock Recently
The last three months saw significant insider selling at Silgan Holdings. Specifically, insiders ditched US$2.0m 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.
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. Silgan Holdings insiders own 30% of the company, currently worth about US$1.0b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Silgan Holdings Insider Transactions Indicate?
Insiders sold stock recently, but they haven’t been buying. And our longer term analysis of insider transactions didn’t bring confidence, either. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Silgan Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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.