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Should You Be Worried About Insider Transactions At Carrols Restaurant Group, Inc. (NASDAQ:TAST)?

Simply Wall St

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 Carrols Restaurant Group, Inc. (NASDAQ:TAST).

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, such insiders must disclose their trading activities, and not trade on inside information.

Insider transactions are not the most important thing when it comes to long-term investing. 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.'

Check out our latest analysis for Carrols Restaurant Group

Carrols Restaurant Group Insider Transactions Over The Last Year

In fact, the recent sale by Richard Cross was the biggest sale of Carrols Restaurant Group shares made by an insider individual in the last twelve months, according to our records. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$7.13). So it is hard to draw any strong conclusion from it.

In the last twelve months insiders purchased 23209 shares for US$198k. But insiders sold 24100 shares worth US$280k. In total, Carrols Restaurant Group insiders sold more than they bought over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NasdaqGS:TAST Recent Insider Trading, August 16th 2019

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Carrols Restaurant Group Insiders Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Carrols Restaurant Group. In total, two insiders bought US$198k worth of shares in that time. But Richard Cross sold shares worth US$126k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Does Carrols Restaurant Group 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. Carrols Restaurant Group insiders own about US$18m worth of shares. That equates to 5.6% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Carrols Restaurant Group Tell Us?

It's certainly positive to see the recent insider purchases. However, the longer term transactions are not so encouraging. We don't take much heart from transactions by Carrols Restaurant Group 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 Carrols Restaurant Group, you should check out this free report on analyst forecasts for the company.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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 editorial-team@simplywallst.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.