Insiders who bought Churchill Downs Incorporated (NASDAQ:CHDN) stock lover the last 12 months are probably not as affected by last week’s 6.1% loss. After accounting for the recent loss, the US$93k worth of shares they purchased is now worth US$96k, suggesting a good return on their investment.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Churchill Downs
In the last twelve months, the biggest single purchase by an insider was when Independent Chairman of the Board R. Rankin bought US$93k worth of shares at a price of US$177 per share. So it's clear an insider wanted to buy, at around the current price, which is US$183. 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. The good news for Churchill Downs share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was R. Rankin.
The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Churchill Downs is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Churchill Downs Boast High Insider Ownership?
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. Churchill Downs insiders own 4.8% of the company, currently worth about US$323m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Churchill Downs Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Churchill Downs insiders think the business has merit. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 2 warning signs for Churchill Downs (1 is potentially serious) you should be aware of.
But note: Churchill Downs 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.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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