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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell The Clorox Company (NYSE:CLX), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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.’
Clorox Insider Transactions Over The Last Year
Denise Garner made the biggest insider sale in the last 12 months. That single transaction was for US$1.1m worth of shares at a price of US$163 each. That means that an insider was selling shares at around the current price of US$156. While their view may have changed since the sale, this is not a particularly positive fact. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
Over the last year, we note insiders sold 13.87k shares worth US$2.1m. All up, insiders sold more shares in Clorox than they bought, over the last year. The sellers received a price of around US$154, on average. It’s not particularly great to see insiders were selling shares around current prices. 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!
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 Clorox Have Sold Stock Recently
The last quarter saw substantial insider selling of Clorox shares. In total, Denise Garner dumped US$1.1m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of Clorox
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 appears that Clorox insiders own 0.2% of the company, worth about US$50m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Clorox Insiders?
An insider sold Clorox shares recently, but they didn’t buy any. And there weren’t any purchases to give us comfort, over the last year. While insiders do own shares, they don’t own a heap, and they have been selling. We’d think twice before buying! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Clorox.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.