It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell Criteo S.A. (NASDAQ:CRTO), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
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, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. 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.’
Criteo Insider Transactions Over The Last Year
Co-Founder Jean-Baptiste Rudelle made the biggest insider purchase in the last 12 months. That single transaction was for US$515k worth of shares at a price of US$23.42 each. So it’s clear an insider wanted to buy, at around the current price. That means they have been optimistic about the company in the past, though they may have changed their mind. In any event it’s generally a positive if insiders are buying shares at around the current price. Jean-Baptiste Rudelle was the only individual insider to buy over the year.
Over the last year we saw more insider selling of Criteo shares, than buying. The average sell price was around US$27.72. We don’t gain confidence from insider selling below the recent share price. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Criteo better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Criteo Insiders Are Selling The Stock
The last three months saw significant insider selling at Criteo. In total, insiders dumped US$308k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the directors think that the shares are a bargain.
Does Criteo 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. It appears that Criteo insiders own 2.3% of the company, worth about US$40m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Criteo Insider Transactions Indicate?
Insiders haven’t bought Criteo stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. While insiders do own shares, they don’t own a heap, and they have been selling. We’re in no rush to buy! Of course, the future is what matters most. So if you are interested in Criteo, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.