We often see insiders buying up shares in companies that perform well over the long term. 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 ICC Holdings, Inc. (NASDAQ:ICCH).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
The Last 12 Months Of Insider Transactions At ICC Holdings
In fact, the recent sale by Director John Klockau was not their only sale of ICC Holdings shares this year. They previously made an even bigger sale of -US$94.5k worth of shares at a price of US$13.50 per share. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$13.66. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 6.1% of John Klockau's stake.
In the last twelve months insiders purchased 3440.5 shares for US$48k. On the other hand they divested 9322 shares, for US$126k. In total, ICC Holdings insiders sold more than they bought over the last year. The chart below shows insider transactions (by individuals) over the last year. 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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ICC Holdings Insiders Are Selling The Stock
Over the last three months, we've seen a bit of insider selling at ICC Holdings. John Klockau divested only US$28k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.
Insider Ownership of ICC Holdings
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. ICC Holdings insiders own 45% of the company, currently worth about US$18m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At ICC Holdings Tell Us?
While there has not been any insider buying in the last three months, there has been selling. However, the sales are not big enough to concern us at all. It's great to see high levels of insider ownership, but looking back at the last year, we don't gain confidence from the ICC Holdings insiders selling. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
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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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