Insiders Of Citi Trends Make A Tidy Sum Selling At US$23.04

Last week, Citi Trends, Inc.'s (NASDAQ:CTRN) stock jumped 13%, but insiders who sold US$261k worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$23.04, 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.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Citi Trends

The Last 12 Months Of Insider Transactions At Citi Trends

In the last twelve months, the biggest single sale by an insider was when the Lead Independent Director, Jonathan Duskin, sold US$261k worth of shares at a price of US$23.56 per share. That means that an insider was selling shares at slightly below the current price (US$31.00). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was 74% of Jonathan Duskin's stake. Jonathan Duskin was the only individual insider to sell over the last year.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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 Citi Trends

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 Citi Trends insiders own 4.7% of the company, worth about US$11m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Citi Trends Insider Transactions Indicate?

The fact that there have been no Citi Trends insider transactions recently certainly doesn't bother us. Still, the insider transactions at Citi Trends in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. 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. Every company has risks, and we've spotted 1 warning sign for Citi Trends you should know about.

But note: Citi Trends may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.