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 shareholders might well want to know whether insiders have been buying or selling shares in The Chemours Company (NYSE:CC).
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, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
The Last 12 Months Of Insider Transactions At Chemours
The Chief Operating Officer, Mark Newman, made the biggest insider sale in the last 12 months. That single transaction was for US$2.3m worth of shares at a price of US$38.26 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$13.48. So it may not tell us anything about how insiders feel about the current share price.
Happily, we note that in the last year insiders paid US$2.1m for 104k shares. On the other hand they divested 70290 shares, for US$2.7m. Over the last year we saw more insider selling of Chemours shares, than buying. They sold for an average price of about US$38.33. Insider selling doesn't make us excited to buy. But the selling was at much higher prices than the current share price (US$13.48), so it probably doesn't tell us a lot about the value on offer today. 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!
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).
Chemours Insiders Bought Stock Recently
It's good to see that Chemours insiders have made notable investments in the company's shares. In total, insiders bought US$1.5m worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Does Chemours 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. We usually like to see fairly high levels of insider ownership. Insiders own 1.0% of Chemours shares, worth about US$22m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Chemours Tell Us?
It is good to see recent purchasing. However, the longer term transactions are not so encouraging. We don't take much heart from transactions by Chemours insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. Of course, the future is what matters most. So if you are interested in Chemours, you should check out this free report on analyst forecasts for the company.
But note: Chemours 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.
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 firstname.lastname@example.org. 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.