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 Cincinnati Bell Inc. (NYSE:CBB).
What Is Insider Selling?
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.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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.'
The Last 12 Months Of Insider Transactions At Cincinnati Bell
The Chairman of the Board, Phillip Cox, made the biggest insider sale in the last 12 months. That single transaction was for US$184k worth of shares at a price of US$12.60 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$10.16. So it may not tell us anything about how insiders feel about the current share price. Phillip Cox was the only individual insider to sell shares in the last twelve months.
In the last twelve months insiders purchased 3614 shares for US$46k. On the other hand they divested 14597 shares, for US$184k. The chart below shows insider transactions (by 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Cincinnati Bell Boast High Insider Ownership?
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. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Cincinnati Bell insiders own 1.5% of the company, worth about US$7.5m. We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At Cincinnati Bell Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. The insider transactions at Cincinnati Bell are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. 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.
But note: Cincinnati Bell 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.
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