We often see insiders buying up shares in companies that perform well over the long term. 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 we’ll take a look at whether insiders have been buying or selling shares in Trinseo S.A. (NYSE:TSE).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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’.
Trinseo Insider Transactions Over The Last Year
Chairman Stephen Zide made the biggest insider purchase in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$52.28 each. That means that an insider was happy to buy shares at above the current price. Their view may have changed since then, but at least it shows they felt optimistic at the time. We generally consider it a positive if insiders have been buying on market, even above the current price.
In the last twelve months insiders purchased 24.50k shares for US$1.2m. But they sold 17.95k for US$1.4m. In total, Trinseo insiders sold more than they bought over the last year. The average sell price was around US$80.40. We are not joyful about insider selling. However, we do note that the average sale price was significantly higher than the current share price (which is US$50.95). The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Trinseo is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Trinseo Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Trinseo. We can see that Executive VP & CFO Barry Niziolek paid US$218k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Trinseo insiders own 0.7% of the company, worth about US$14m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Trinseo Insider Transactions Indicate?
It’s certainly positive to see the recent insider purchase. But we can’t say the same for the transactions over the last 12 months. The more recent transactions are a positive, but Trinseo insiders haven’t shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. Overall they seem reasonably aligned. Of course, the future is what matters most. So if you are interested in Trinseo, 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.
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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.