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Should You Take Comfort From Insider Transactions At CenturyLink, Inc. (NYSE:CTL)?

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 we'll take a look at whether insiders have been buying or selling shares in CenturyLink, Inc. (NYSE:CTL).

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 in the company. However, rules govern insider transactions, and certain disclosures are required.

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. 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.

See our latest analysis for CenturyLink

CenturyLink Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by President Jeffrey Storey for US$991k worth of shares, at about US$11.94 per share. That means that an insider was happy to buy shares at around the current price of US$13.96. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months insiders purchased 285.00k shares for US$3.2m. But they sold 3072 for US$43k. In total, CenturyLink insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NYSE:CTL Recent Insider Trading, February 5th 2020
NYSE:CTL Recent Insider Trading, February 5th 2020

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.

CenturyLink Insiders Are Selling The Stock

We have seen a bit of insider selling at CenturyLink, over the last three months. Independent Director Laurie Siegel sold just US$43k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the selling simply isn't sufficiently substantial to be of much use as a signal.

Does CenturyLink Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that CenturyLink insiders own 0.7% of the company, worth about US$112m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The CenturyLink Insider Transactions Indicate?

We did not see any insider buying in the last three months, but we did see selling. But the sales were small, so we're not concerned. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like CenturyLink insiders think the business has merit. Of course, the future is what matters most. So if you are interested in CenturyLink, you should check out this free report on analyst forecasts for the company.

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

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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.

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. Thank you for reading.

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