Need To Know: Royal Caribbean Cruises Ltd. (NYSE:RCL) 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. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Royal Caribbean Cruises Ltd. (NYSE:RCL).
Do Insider Transactions Matter?
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.
We don’t think shareholders should simply follow insider transactions. 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’.
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The Last 12 Months Of Insider Transactions At Royal Caribbean Cruises
Over the last year, we can see that the biggest insider sale was by President & CEO of Royal Caribbean International Michael Bayley for US$2.5m worth of shares, at about US$132 per share. That means that an insider was selling shares at around the current price of US$112. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.
All up, insiders sold more shares in Royal Caribbean Cruises than they bought, over the last year. The average sell price was around US$130. It’s not particularly great to see insiders were selling shares at below recent prices. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Royal Caribbean Cruises is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Royal Caribbean Cruises Insiders Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at Royal Caribbean Cruises. We can see that Richard Fain paid US$2.0m for shares in the company. But Independent Director Bernt Reitan sold shares worth US$168k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Insider Ownership
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that Royal Caribbean Cruises insiders own 1.0% of the company, worth about US$242m. 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 Royal Caribbean Cruises Tell Us?
It is good to see recent insider purchase. However, the longer term transactions are not so encouraging. Overall, we’d prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, Royal Caribbean Cruises insiders are reasonably well aligned, and optimistic for the future. Of course, the future is what matters most. So if you are interested in Royal Caribbean Cruises, 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 editorial-team@simplywallst.com.
