We often see insiders buying up shares in companies that perform well over the long term. 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 we’ll take a look at whether insiders have been buying or selling shares in Shoe Carnival, Inc. (NASDAQ:SCVL).
What Is Insider Selling?
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 don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
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The Last 12 Months Of Insider Transactions At Shoe Carnival
President Clifton Sifford made the biggest insider sale in the last 12 months. That single transaction was for US$178k worth of shares at a price of US$23.75 each. That means that even when the share price was below the current price of US$38.16, an insider wanted to cash in some shares. Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. When an insider sells below the current price, it does tend to make us wonder about the current valuation. It is worth noting that this sale was only 3% of Clifton Sifford’s holding.
Over the last year, we note insiders sold 19.59k shares worth US$559k. Over the last year we saw more insider selling of Shoe Carnival shares, than buying. They sold for an average price of about US$28.56. It’s not ideal to see that insiders have sold at around the current price. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. 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!
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Insiders at Shoe Carnival Have Sold Stock Recently
The last quarter saw substantial insider selling of Shoe Carnival shares. In total, Lead Director Kent Kleeberger dumped US$92k 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 Shoe Carnival Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that Shoe Carnival insiders own 37% of the company, worth about US$203m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Shoe Carnival Tell Us?
An insider hasn’t bought Shoe Carnival 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. But since Shoe Carnival is profitable and growing, we’re not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Shoe Carnival.
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To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.