Possible bearish signals as Catalent, Inc. (NYSE:CTLT) insiders disposed of US$658k worth of stock

Published
June 21, 2022
NYSE:CTLT
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Over the past year, many Catalent, Inc. (NYSE:CTLT) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Catalent

Catalent Insider Transactions Over The Last Year

The Independent Director, Gregory Lucier, made the biggest insider sale in the last 12 months. That single transaction was for US$645k worth of shares at a price of US$128 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$103. So it is hard to draw any strong conclusion from it.

Insiders in Catalent didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NYSE:CTLT Insider Trading Volume June 21st 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders at Catalent Have Sold Stock Recently

Over the last three months, we've seen a bit of insider selling at Catalent. insider Mario Gargiulo only netted US$13k selling shares, in that period. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Catalent insiders own 0.4% of the company, worth about US$69m. 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 Catalent Insider Transactions Indicate?

While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. Recent sales exacerbate our caution arising from analysis of Catalent insider transactions. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for Catalent (1 shouldn't be ignored!) that we believe deserve your full attention.

Of course Catalent 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, but not derivative transactions.

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