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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in The Children's Place, Inc. (NASDAQ:PLCE).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.'
Children's Place Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the CEO, President & Director, Jane Elfers, sold US$13m worth of shares at a price of US$135 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$101. So it may not shed much light on insider confidence at current levels.
We note that in the last year insiders divested 101k shares for a total of US$14m. In the last year Children's Place insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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 Children's Place Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Children's Place. In total, Claudia Lima-Guinehut sold US$100k 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.
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. We usually like to see fairly high levels of insider ownership. Insiders own 2.9% of Children's Place shares, worth about US$47m. 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 Children's Place Tell Us?
An insider hasn't bought Children's Place stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Children's Place.
Of course Children's Place 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 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.