Shareholders Can't Ignore US$5.2m Of Sales By Charles River Laboratories International Insiders

Even though Charles River Laboratories International, Inc. (NYSE:CRL) stock gained 19% last week, insiders who sold US$5.2m worth of stock over the past year are probably better off. Selling at an average price of US$242, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Charles River Laboratories International

Charles River Laboratories International Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Corporate Executive VP & Chief People Officer, Victoria Creamer, for US$1.3m worth of shares, at about US$254 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$215. So it is hard to draw any strong conclusion from it.

Over the last year, we can see that insiders have bought 6.94k shares worth US$1.2m. On the other hand they divested 21.36k shares, for US$5.2m. Over the last year we saw more insider selling of Charles River Laboratories International shares, than buying. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of Charles River Laboratories International

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Charles River Laboratories International insiders own about US$117m worth of shares (which is 1.1% of the company). 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 Does This Data Suggest About Charles River Laboratories International Insiders?

It doesn't really mean much that no insider has traded Charles River Laboratories International shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Charles River Laboratories International insider transactions don't fill us with confidence. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Charles River Laboratories International. While conducting our analysis, we found that Charles River Laboratories International has 1 warning sign and it would be unwise to ignore this.

Of course Charles River Laboratories International 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.