It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we'll take a look at whether insiders have been buying or selling shares in Deckers Outdoor Corporation (NYSE:DECK).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
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.
The Last 12 Months Of Insider Transactions At Deckers Outdoor
In the last twelve months, the biggest single sale by an insider was when the Independent Chairman of the Board, John Gibbons, sold US$402k worth of shares at a price of US$134 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$158. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 9.5% of John Gibbons's holding.
In the last twelve months insiders netted US$1.6m for 11513 shares sold. In the last year Deckers Outdoor insiders didn't buy any company stock. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does Deckers Outdoor Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Deckers Outdoor insiders own 0.8% of the company, worth about US$36m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Deckers Outdoor Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by Deckers Outdoor 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 Deckers Outdoor.
Of course Deckers Outdoor may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
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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.