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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Sensient Technologies Corporation (NYSE:SXT).
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 on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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’.
Sensient Technologies Insider Transactions Over The Last Year
Director Deborah McKeithan-Gebhardt made the biggest insider purchase in the last 12 months. That single transaction was for US$128k worth of shares at a price of US$64.02 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. It’s not at all bad to see insiders buy shares at or above current prices.
Over the last year, we can see that insiders have bought 5.00k shares worth US$333k. Overall, Sensient Technologies insiders were net buyers last year. They paid about US$66.59 on average. I’d consider this a positive as it suggests insiders see value at around the current price, which is US$62.85. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Sensient Technologies better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership of Sensient Technologies
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 Sensient Technologies insiders own 1.0% of the company, worth about US$26m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Sensient Technologies Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Sensient Technologies shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Sensient Technologies and we see no evidence to suggest they are worried about the future. Of course, the future is what matters most. So if you are interested in Sensient Technologies, you should check out this free report on analyst forecasts for the company.
But note: Sensient Technologies 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.
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. On rare occasion, data errors may occur. Thank you for reading.