How Many Insiders Sold Scholastic Corporation (NASDAQ:SCHL) Shares?
It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in Scholastic Corporation (NASDAQ:SCHL).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
See our latest analysis for Scholastic
Scholastic Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Chairman Richard Robinson for US$3.3m worth of shares, at about US$39.92 per share. That means that an insider was selling shares at slightly below the current price (US$41.81). While sellers have a variety of reasons for selling, this isn’t particularly great to see. When an insider sells below the current price, it does tend to make us wonder about the current valuation. We note that the biggest single sale was only 5.8% of Richard Robinson’s holding.
We note that in the last year insiders divested 190.35k shares for a total of US$7.5m. All up, insiders sold more shares in Scholastic than they bought, over the last year. The sellers received a price of around US$39.31, on average. It’s not ideal to see that insiders have sold at around the current price. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Scholastic better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Scholastic Have Sold Stock Recently
The last quarter saw substantial insider selling of Scholastic shares. Specifically, Executive Vice President Judith Newman ditched US$105k worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that Scholastic insiders own 7.2% of the company, worth about US$104m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Scholastic Insider Transactions Indicate?
An insider hasn’t bought Scholastic stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. Of course, the future is what matters most. So if you are interested in Scholastic, you should check out this free report on analyst forecasts for the company.
Of course Scholastic may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
