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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 shareholders might well want to know whether insiders have been buying or selling shares in Coca-Cola Amatil Limited (ASX:CCL).
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.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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’.
Coca-Cola Amatil Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Group MD & Executive Director Alison Watkins for AU$1.0m worth of shares, at about AU$8.71 per share. That means that even when the share price was higher, an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We generally consider it a positive if insiders have been buying on market, even above the current price. Notably Alison Watkins was also the biggest seller, having sold AU$1.0m worth of shares.
Over the last year, we can see that insiders have bought 129.12k shares worth AU$1.1m. But they sold 116.62k for AU$1.0m. In total, Coca-Cola Amatil insiders bought more than they sold over the last year. They paid about AU$8.74 on average. These transactions suggest that insiders have considered the current price of AU$8.62 attractive. 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!
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Insider Ownership of Coca-Cola Amatil
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Coca-Cola Amatil insiders own 0.2% of the company, worth about AU$9.9m. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
What Might The Insider Transactions At Coca-Cola Amatil Tell Us?
It doesn’t really mean much that no insider has traded Coca-Cola Amatil shares in the last quarter. However, our analysis of transactions over the last year is heartening. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Coca-Cola Amatil insiders are doubting the company. Of course, the future is what matters most. So if you are interested in Coca-Cola Amatil, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.