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Should You Be Worried About Insider Transactions At Century Casinos, Inc. (NASDAQ:CNTY)?

Simply Wall St

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Century Casinos, Inc. (NASDAQ:CNTY).

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, 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. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

See our latest analysis for Century Casinos

The Last 12 Months Of Insider Transactions At Century Casinos

In the last twelve months, the biggest single sale by an insider was when Chairman & Co-CEO Erwin Haitzmann sold US$850k worth of shares at a price of US$8.67 per share. So it’s clear an insider wanted to take some cash off the table, even slightly below the current price of US$8.80. Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. Please note, however, that this single sale was just 7.7% of Erwin Haitzmann’s stake. Notably Erwin Haitzmann was also the biggest buyer, having purchased US$160k worth of shares.

Happily, we note that in the last year insiders paid US$160k for 23.00k shares. But they sold 194.40k for US$1.7m. In total, Century Casinos insiders sold more than they bought over the last year. The sellers received a price of around US$8.73, on average. It’s not too encouraging to see that insiders have sold at below the current price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. 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!

NasdaqCM:CNTY Recent Insider Trading, March 17th 2019

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders at Century Casinos Have Bought Stock Recently

Over the last quarter, Century Casinos insiders have spent a meaningful amount on shares. Specifically, Vice Chairman Peter Hoetzinger bought US$75k worth of shares in that time, and we didn’t record any sales whatsoever. This is a positive in our book as it implies some confidence.

Does Century Casinos 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 4.6% of Century Casinos shares, worth about US$12m. 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 Century Casinos Insiders?

It’s certainly positive to see the recent insider purchase. On the other hand the transaction history, over the last year, isn’t so positive. We don’t take much heart from transactions by Century Casinos 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. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Century Casinos.

But note: Century Casinos may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.