Insiders Who Purchased US$31.1m Of Clear Channel Outdoor Holdings Stock May Not Have Expected 10% Tumble

The recent 10% drop in Clear Channel Outdoor Holdings, Inc.'s (NYSE:CCO) stock could come as a blow to insiders who purchased US$31.1m worth of stock at an average buy price of US$1.61 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$26.6m which is not ideal.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Clear Channel Outdoor Holdings

The Last 12 Months Of Insider Transactions At Clear Channel Outdoor Holdings

The insider Arturo Moreno made the biggest insider purchase in the last 12 months. That single transaction was for US$23m worth of shares at a price of US$1.65 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$1.38). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Arturo Moreno.

Arturo Moreno bought 19.26m shares over the last 12 months at an average price of US$1.61. 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!

Clear Channel Outdoor Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 13% of Clear Channel Outdoor Holdings shares, worth about US$89m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Clear Channel Outdoor Holdings Tell Us?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Clear Channel Outdoor Holdings shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Clear Channel Outdoor Holdings you should be aware of, and 1 of them can't be ignored.

Of course Clear Channel Outdoor Holdings 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.