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 PotlatchDeltic Corporation (NASDAQ:PCH).
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, most countries require that the company discloses such transactions to the market.
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. 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’.
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PotlatchDeltic Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Chairman & CEO Michael Covey sold US$5.0m worth of shares at a price of US$51.02 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$34.12. So it may not tell us anything about how insiders feel about the current share price.
We note that in the last year insiders divested 182.03k shares for a total of US$9.4m. Over the last year we saw more insider selling of PotlatchDeltic shares, than buying. They sold for an average price of about US$51.89. Insider selling doesn’t make us excited to buy. However, we do note that the average sale price was significantly higher than the current share price (which is US$34.12). You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 2.6% of PotlatchDeltic shares, worth about US$57m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The PotlatchDeltic Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded PotlatchDeltic shares in the last quarter. We don’t take much encouragement from the transactions by PotlatchDeltic insiders. The modest level of insider ownership is, at least, some comfort. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for PotlatchDeltic.
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 firstname.lastname@example.org.