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 Movado Group, Inc. (NYSE:MOV), 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 don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia 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 Movado Group
In the last twelve months, the biggest single sale by an insider was when Director Richard Coté sold US$2.8m worth of shares at a price of US$37.55 per share. So we know that an insider sold shares at around the present share price of US$34.42. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
All up, insiders sold more shares in Movado Group than they bought, over the last year. The average sell price was around US$42.22. Insider selling doesn’t make us excited to buy. But the selling was at much higher prices than the current share price (US$34.42), so it probably doesn’t tell us a lot about the value on offer today. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Movado Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that Movado Group insiders own 15% of the company, worth about US$121m. 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 Movado Group Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Movado Group shares in the last quarter. It’s great to see high levels of insider ownership, but looking back at the last year, we don’t gain confidence from the Movado Group insiders selling. 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.
Of course Movado Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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