We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Collectors Universe, Inc. (NASDAQ:CLCT), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Colombia 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’.
The Last 12 Months Of Insider Transactions At Collectors Universe
A. Allen made the biggest insider sale in the last 12 months. That single transaction was for US$487k worth of shares at a price of US$16.24 each. That is hardly a positive sign, even though it took place above the latest price (US$11.40). So it is hard to draw any strong conclusion from it.
In the last twelve months insiders netted US$1.5m for 101.59k shares sold. All up, insiders sold more shares in Collectors Universe than they bought, over the last year. The average sell price was around US$15.23. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of US$11.40. 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!
I will like Collectors Universe better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Collectors Universe Have Sold Stock Recently
The last three months saw significant insider selling at Collectors Universe. Specifically, Independent Director Deborah Farrington ditched US$207k 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.
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It’s great to see that Collectors Universe insiders own 13% of the company, worth about US$13m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Collectors Universe Tell Us?
An insider hasn’t bought Collectors Universe stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn’t show any insider buying. While insiders do own shares, they don’t own a heap, and they have been selling. So we’d only buy after careful consideration. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 firstname.lastname@example.org.