Don't Ignore The Insider Selling In Packaging Corporation of America

Some Packaging Corporation of America (NYSE:PKG) shareholders may be a little concerned to see that the Chairman of the Board & CEO, Mark Kowlzan, recently sold a substantial US$9.9m worth of stock at a price of US$187 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 9.7%.

View our latest analysis for Packaging Corporation of America

The Last 12 Months Of Insider Transactions At Packaging Corporation of America

In fact, the recent sale by Mark Kowlzan was the biggest sale of Packaging Corporation of America shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$187, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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. This single sale was just 9.7% of Mark Kowlzan's stake.

Insiders in Packaging Corporation of America didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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 winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Packaging Corporation of America

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. Packaging Corporation of America insiders own 1.7% of the company, currently worth about US$282m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Packaging Corporation of America Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Packaging Corporation of America has 2 warning signs we think you should be aware of.

Of course Packaging Corporation of America 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.