It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Shutterstock, Inc. (NYSE:SSTK).
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, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. 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.’
View our latest analysis for Shutterstock
Shutterstock Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Presiding Director Thomas Evans for US$512k worth of shares, at about US$51.18 per share. That is hardly a positive sign, even though it took place above the latest price (US$36.80). So it is hard to draw any strong conclusion from it.
We note that in the last year insiders divested 14.81k shares for a total of US$758k. Over the last year we saw more insider selling of Shutterstock shares, than buying. The sellers received a price of around US$51.18, on average. Insider selling doesn’t make us excited to buy. But we note that the selling, on average, was at well above the recently traded price of US$36.80. You can see the insider transactions 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that Shutterstock insiders own 46% of the company, worth about US$608m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Shutterstock Insider Transactions Indicate?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. It’s great to see high levels of insider ownership, but looking back at the last year, we don’t gain confidence from the Shutterstock insiders selling. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Shutterstock.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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 editorial-team@simplywallst.com.