We wouldn't blame Cintas Corporation (NASDAQ:CTAS) shareholders if they were a little worried about the fact that Michael Thompson, the Executive VP & Chief Administrative Officer recently netted about US$536k selling shares at an average price of US$268. However, that sale only accounted for 3.1% of their holding, so arguably it doesn't say much about their conviction.
The Last 12 Months Of Insider Transactions At Cintas
Over the last year, we can see that the biggest insider sale was by the Lead Director, Joseph Scaminace, for US$1.4m worth of shares, at about US$222 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$267. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 44% of Joseph Scaminace's stake.
We note that in the last year insiders divested 16410 shares for a total of US$3.6m. Cintas insiders didn't buy any shares over the last year. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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Insider Ownership of Cintas
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Cintas insiders own 16% of the company, worth about US$4.3b. 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 Does This Data Suggest About Cintas Insiders?
An insider sold Cintas shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since Cintas is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Cintas.
But note: Cintas 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.