Should You Be Worried About Insider Transactions At CenturyLink, Inc. (NYSE:CTL)?

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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 shareholders might well want to know whether insiders have been buying or selling shares in CenturyLink, Inc. (NYSE:CTL).

What Is Insider Buying?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.

View our latest analysis for CenturyLink

The Last 12 Months Of Insider Transactions At CenturyLink

The Director, Glen Post, made the biggest insider sale in the last 12 months. That single transaction was for US$3.6m worth of shares at a price of US$24.00 each. While we don’t usually like to see insider selling, it’s more concerning if the sales take price at a lower price. The silver lining is that this sell-down took place above the latest price (US$10.34). So it may not tell us anything about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid US$3.3m for 293k shares. But they sold 353k for US$7.9m. All up, insiders sold more shares in CenturyLink than they bought, over the last year. You can see the insider transactions (by 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!

NYSE:CTL Recent Insider Trading, June 4th 2019
NYSE:CTL Recent Insider Trading, June 4th 2019

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders at CenturyLink Have Bought Stock Recently

Over the last quarter, CenturyLink insiders have spent a meaningful amount on shares. In total, insiders bought US$3.2m worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.

Does CenturyLink Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that CenturyLink insiders own 0.7% of the company, worth about US$83m. 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 CenturyLink Insider Transactions Indicate?

It’s certainly positive to see the recent insider purchases. However, the longer term transactions are not so encouraging. We don’t take much heart from transactions by CenturyLink insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.