Are Insiders Selling Consolidated-Tomoka Land Co. (NYSEMKT:CTO) Stock?
We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Consolidated-Tomoka Land Co. (NYSEMKT:CTO).
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 logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
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The Last 12 Months Of Insider Transactions At Consolidated-Tomoka Land
Over the last year, we can see that the biggest insider sale was by Senior Vice President of Investments Steven Greathouse for US$180k worth of shares, at about US$64.25 per share. So what is clear is that an insider saw fit to sell at around the current price of US$59.26. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
We note that in the last year insiders divested 4.95k shares for a total of US$296k. All up, insiders sold more shares in Consolidated-Tomoka Land than they bought, over the last year. The sellers received a price of around US$59.75, on average. We don’t gain much confidence from insider selling near the recent share price. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Consolidated-Tomoka Land 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
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Consolidated-Tomoka Land insiders own about US$11m worth of shares. That equates to 3.5% of the company. 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 Consolidated-Tomoka Land Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Consolidated-Tomoka Land shares in the last quarter. Still, the insider transactions at Consolidated-Tomoka Land in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
