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Have Insiders Been Buying Carriage Services, Inc. (NYSE:CSV) Shares?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we'll take a look at whether insiders have been buying or selling shares in Carriage Services, Inc. (NYSE:CSV).

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.

Check out our latest analysis for Carriage Services

Carriage Services Insider Transactions Over The Last Year

The Founder, Melvin Payne, made the biggest insider sale in the last 12 months. That single transaction was for US$384k worth of shares at a price of US$14.97 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$18.72. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 2.0% of Melvin Payne's stake.

In the last twelve months insiders purchased 32.85k shares for US$698k. On the other hand they divested 32997 shares, for US$557k. Overall, Carriage Services insiders were net buyers during the last year. They paid about US$21.27 on average. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

NYSE:CSV Recent Insider Trading June 1st 2020
NYSE:CSV Recent Insider Trading June 1st 2020

Carriage Services is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at Carriage Services Have Sold Stock Recently

Over the last three months, we've seen a bit of insider selling at Carriage Services. The selling netted US$384k for Founder Melvin Payne. But at least we saw US$342k worth of buying. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

Does Carriage Services Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Carriage Services insiders own 9.1% of the company, worth about US$30m. 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 Carriage Services Insider Transactions Indicate?

Insider selling has just outweighed insider buying in the last three months. But the difference isn't enough to have us worried. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Carriage Services and their transactions don't cause us concern. 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. Our analysis shows 5 warning signs for Carriage Services (1 doesn't sit too well with us!) and we strongly recommend you look at them before investing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

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. 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. Thank you for reading.

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