We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Party City Holdco Inc. (NYSE:PRTY), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Party City Holdco
Non-Employee Senior Adviser & Director Gerald Rittenberg made the biggest insider sale in the last 12 months. That single transaction was for US$3.7m worth of shares at a price of US$15.49 each. That is hardly a positive sign, even though it took place above the latest price (US$11.40). So it may not shed much light on insider confidence at current levels. Gerald Rittenberg was the only individual insider to sell over the last year.
In the last twelve months insiders purchased 168.06k shares for US$1.7m. But they sold 485.46k for US$7.5m. Gerald Rittenberg divested 485.46k shares over the last 12 months at an average price of US$15.50. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Party City Holdco Have Bought Stock Recently
It’s good to see that Party City Holdco insiders have made notable investments in the company’s shares. Not only was there no selling that we can see, but they collectively bought US$1.7m worth of shares. This could be interpreted as suggesting a positive outlook.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 1.1% of Party City Holdco shares, 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 Does This Data Suggest About Party City Holdco Insiders?
The recent insider purchases are heartening. But we can’t say the same for the transactions over the last 12 months. While recent transactions indicate confidence in Party City Holdco, insiders don’t own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Party City Holdco.
But note: Party City Holdco 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.