We often see insiders buying up shares in companies that perform well over the long term. 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 before you buy or sell Park-Ohio Holdings Corp. (NASDAQ:PKOH), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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 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.’
Park-Ohio Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by President & Director Edward Crawford for US$2.0m worth of shares, at about US$40.59 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$32.90. So it may not tell us anything about how insiders feel about the current share price.
Over the last year, we note insiders sold 117.10k shares worth US$4.7m. In total, Park-Ohio Holdings insiders sold more than they bought over the last year. The average sell price was around US$40.44. We are not joyful about insider selling. But the selling was at much higher prices than the current share price (US$32.90), so it probably doesn’t tell us a lot about the value on offer today. 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Park-Ohio Holdings Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at Park-Ohio Holdings. In total, insiders sold US$206k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the directors think that the shares are a bargain.
Does Park-Ohio Holdings 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. Park-Ohio Holdings insiders own about US$126m worth of shares (which is 32% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Park-Ohio Holdings Tell Us?
Insiders sold Park-Ohio Holdings shares recently, but they didn’t buy any. Looking to the last twelve months, our data doesn’t show any insider buying. But it is good to see that Park-Ohio Holdings is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. 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.
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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.