Need To Know: Prestige Consumer Healthcare Inc. (NYSE:PBH) Insiders Have Been Selling Shares
We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Prestige Consumer Healthcare Inc. (NYSE:PBH), you may well want to know whether insiders have been buying or selling.
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.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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The Last 12 Months Of Insider Transactions At Prestige Consumer Healthcare
In the last twelve months, the biggest single sale by an insider was when Executive Vice President of Sales & Marketing Timothy Connors sold US$1.3m worth of shares at a price of US$38.25 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$27.87. So it is hard to draw any strong conclusion from it. Timothy Connors was the only individual insider to sell shares in the last twelve months.
Happily, we note that in the last year insiders paid US$829k for 23.20k shares. But they sold 48.30k for US$1.9m. Timothy Connors sold a total of 48.30k shares over the year at an average price of US$38.47. 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!
I will like Prestige Consumer Healthcare better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership
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. From our data, it seems that Prestige Consumer Healthcare insiders own 0.4% of the company, worth about US$5.6m. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
What Might The Insider Transactions At Prestige Consumer Healthcare Tell Us?
An insider sold Prestige Consumer Healthcare shares recently, but they didn’t buy any. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. But since Prestige Consumer Healthcare is profitable and growing, we’re not too worried by this. When you combine this with the relatively low insider ownership, we are very cautious about the stock. So we’re not rushing to buy, to say the least. Of course, the future is what matters most. So if you are interested in Prestige Consumer Healthcare, you should check out this free report on analyst forecasts for the company.
But note: Prestige Consumer Healthcare may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 editorial-team@simplywallst.com.
