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Should You Be Worried About Insider Transactions At Crown Crafts, Inc. (NASDAQ:CRWS)?

Simply Wall St

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in Crown Crafts, Inc. (NASDAQ:CRWS).

Do Insider Transactions Matter?

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 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 Crown Crafts

Crown Crafts Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the CEO & President of Crown Crafts Infant Products Inc, Nanci Freeman, sold US$120k worth of shares at a price of US$6.06 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$4.98. So it may not tell us anything about how insiders feel about the current share price.

All up, insiders sold more shares in Crown Crafts 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!

NasdaqCM:CRWS Recent Insider Trading, April 18th 2019

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

Insider Ownership of Crown Crafts

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Crown Crafts insiders own about US$7.3m worth of shares (which is 15% of the company). We do generally prefer see higher levels of insider ownership.

So What Do The Crown Crafts Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Crown Crafts shares in the last quarter. We don't take much encouragement from the transactions by Crown Crafts insiders. And usually insiders own more stock in the company, according to our data. 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 Crown Crafts may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.