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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Cooper-Standard Holdings Inc. (NYSE:CPS).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. 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’.
Cooper-Standard Holdings Insider Transactions Over The Last Year
Executive VP & COO Keith Stephenson made the biggest insider sale in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$141 each. That is hardly a positive sign, even though it took place above the latest price (US$72.18). So it may not shed much light on insider confidence at current levels.
Over the last year, we can see that insiders have bought 18.84k shares worth US$1.4m. On the other hand they divested 42.34k shares, for US$5.7m. Over the last year we saw more insider selling of Cooper-Standard Holdings shares, than buying. The average sell price was around US$134. We are not joyful about insider selling. But the selling was at much higher prices than the current share price (US$72.18), so it probably doesn’t tell us a lot about the value on offer today. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Cooper-Standard Holdings Have Bought Stock Recently
It’s good to see that Cooper-Standard Holdings insiders have made notable investments in the company’s shares. Not only was there no selling that we can see, but they collectively bought US$988k worth of shares. This could be interpreted as suggesting a positive outlook.
For a common shareholder, it is worth checking how many shares are held by company 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. Cooper-Standard Holdings insiders own about US$20m worth of shares. That equates to 1.5% of the company. 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 Does This Data Suggest About Cooper-Standard Holdings Insiders?
It’s certainly positive to see the recent insider purchases. On the other hand the transaction history, over the last year, isn’t so positive. The more recent transactions are a positive, but Cooper-Standard Holdings insiders haven’t shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. Overall they seem reasonably aligned. 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 email@example.com.