Don't Ignore The Insider Selling In Criteo

Anyone interested in Criteo S.A. (NASDAQ:CRTO) should probably be aware that the CEO & Director, Megan Clarken, recently divested US$456k worth of shares in the company, at an average price of US$49.17 each. However, the silver lining is that the sale only reduced their total holding by 1.8%, so we're hesitant to read anything much into it, on its own.

See our latest analysis for Criteo

Criteo Insider Transactions Over The Last Year

Notably, that recent sale by CEO & Director Megan Clarken was not the only time they sold Criteo shares this year. They previously made an even bigger sale of -US$1.2m worth of shares at a price of US$32.69 per share. That means that an insider was selling shares at slightly below the current price (US$46.74). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 7.1% of Megan Clarken's stake.

Over the last year, we can see that insiders have bought 85.96k shares worth US$849k. On the other hand they divested 247.47k shares, for US$6.7m. Over the last year we saw more insider selling of Criteo shares, than buying. They sold for an average price of about US$27.06. 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. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Does Criteo Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Criteo insiders own 2.9% of the company, worth about US$76m. 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 Do The Criteo Insider Transactions Indicate?

Insiders sold Criteo shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. But since Criteo is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Criteo. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Criteo.

Of course Criteo 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.

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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.