We often see insiders buying up shares in companies that perform well over the long term. 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 Park-Ohio Holdings Corp. (NASDAQ:PKOH).
What Is Insider Buying?
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 equally, we would consider it foolish to ignore insider transactions altogether. 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'.
Park-Ohio Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Edward Crawford for US$375k worth of shares, at about US$30.38 per share. That means that an insider was happy to buy shares at around the current price of US$31.18. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Park-Ohio Holdings insiders decided to buy shares at close to current prices.
Happily, we note that in the last year insiders paid US$804k for 26613 shares. On the other hand they divested 10595 shares, for US$317k. In the last twelve months there was more buying than selling by Park-Ohio Holdings insiders. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Park-Ohio Holdings 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.
Insiders at Park-Ohio Holdings Have Sold Stock Recently
Over the last three months, we've seen notably more insider selling, than insider buying, at Park-Ohio Holdings. We note Independent Director Ronna Romney cashed in US$131k worth of shares. On the flip side, Vice Chairman & Lead Director James Wert spent US$69k on purchasing shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Park-Ohio Holdings insiders own 31% of the company, currently worth about US$118m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Park-Ohio Holdings Insiders?
Unfortunately, there has been more insider selling of Park-Ohio Holdings stock, than buying, in the last three months. On the other hand, the insider transactions over the last year are encouraging. On top of that, insiders own a significant portion of the company. So we're not too bothered by recent selling. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.