Should You Review Recent Insider Transactions At Kirkland's, Inc. (NASDAQ:KIRK)?

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Kirkland's, Inc. (NASDAQ:KIRK).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

Check out our latest analysis for Kirkland's

The Last 12 Months Of Insider Transactions At Kirkland's

The Senior Vice President of Omni-Channel Retail, Jeffrey Martin, made the biggest insider sale in the last 12 months. That single transaction was for US$380k worth of shares at a price of US$17.66 each. That means that an insider was selling shares at slightly below the current price (US$25.89). 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 100% of Jeffrey Martin's stake. Jeffrey Martin was the only individual insider to sell shares in the last twelve months.

Happily, we note that in the last year insiders paid US$376k for 149.31k shares. On the other hand they divested 21.52k shares, for US$380k. 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!

I will like Kirkland's better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Kirkland's Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Kirkland's shares. In total, Senior Vice President of Omni-Channel Retail Jeffrey Martin sold US$380k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership of Kirkland's

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Kirkland's insiders own 6.0% of the company, worth about US$22m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Kirkland's Insider Transactions Indicate?

An insider sold Kirkland's shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for Kirkland's and we suggest you have a look.

Of course Kirkland's 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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This article by Simply Wall St is general in nature. 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.
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