Should You Take Comfort From Insider Transactions At Crown Holdings, Inc. (NYSE:CCK)?
It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell Crown Holdings, Inc. (NYSE:CCK), you may well want to know whether insiders have been buying or selling.
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, 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 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 Crown Holdings
Crown Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when President Timothy Donahue bought US$433k worth of shares at a price of US$43.25 per share. That means that an insider was happy to buy shares at around the current price. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We generally consider it a positive if insiders have been buying on market, even if the share price has increased a bit since then.
Happily, we note that in the last year insiders paid US$625k for 14.59k shares. On the other hand they divested 500.00 shares, for US$25k. In the last twelve months there was more buying than selling by Crown Holdings insiders. They paid about US$42.80 on average. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of US$45.21. You can see the insider transactions over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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.
Are Crown Holdings Insiders Buying Or Selling?
In the last quarter we saw Andrea Funk spend US$25k on shares. However that only slightly eclipses the sales, US$25k worth of sales. Looking at the net result, we don’t think these recent trades shed much light on how insiders, as a group, are feeling about the company’s prospects.
Does Crown Holdings Boast High Insider Ownership?
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. Crown Holdings insiders own about US$119m worth of shares (which is 1.9% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Crown Holdings Insider Transactions Indicate?
We note a that there has been a tad more insider buying than selling, recently. But the net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Crown Holdings insiders are reasonably well aligned (owning significant chunk of the company’s shares) and optimistic for the future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Crown Holdings.
But note: Crown Holdings 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.
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.
