We'd be surprised if Stepan Company (NYSE:SCL) shareholders haven't noticed that the Independent Director, Gregory Lawton, recently sold US$129k worth of stock at US$99.75 per share. On the bright side, that sale was only 7.5% of their holding, so we doubt it's very meaningful, on its own.
Stepan Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, Arthur Mergner, sold US$311k worth of shares at a price of US$96.16 per share. That means that even when the share price was below the current price of US$99.10, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 15% of Arthur Mergner's stake.
Over the last year, we can see that insiders have bought 2400.89 shares worth US$207k. But they sold 19782.39 for US$1.9m. All up, insiders sold more shares in Stepan than they bought, over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Stepan insiders own 11% of the company, worth about US$241m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Stepan Insiders?
The insider sales have outweighed the insider buying, at Stepan, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Stepan is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Stepan.
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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.
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If you spot an error that warrants correction, please contact the editor at email@example.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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.