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 Century Aluminum Company (NASDAQ:CENX).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
The Last 12 Months Of Insider Transactions At Century Aluminum
In the last twelve months, the biggest single sale by an insider was when the President, Michael Bless, sold US$224k worth of shares at a price of US$8.96 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$5.67). So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Michael Bless.
Happily, we note that in the last year insiders paid US$146k for 20000 shares. On the other hand they divested 25000 shares, for US$224k. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Century Aluminum better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Century Aluminum Insiders Bought Stock Recently
We saw some Century Aluminum insider buying shares in the last three months. Non-Executive Chairman Andrew Michelmore shelled out US$29k for shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership of Century Aluminum
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. Insiders own 1.0% of Century Aluminum shares, worth about US$5.2m, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Does This Data Suggest About Century Aluminum Insiders?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. We don't take much encouragement from the transactions by Century Aluminum insiders. And we're not picking up on high enough insider ownership to give us any comfort. Of course, the future is what matters most. So if you are interested in Century Aluminum, you should check out this free report on analyst forecasts for the company.
Of course Century Aluminum may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
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.