Compass Group Insiders Sell US$5.7m Of Stock, Possibly Signalling Caution
The fact that multiple Compass Group PLC (LON:CPG) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Compass Group
The Group CEO & Director, Dominic Blakemore, made the biggest insider sale in the last 12 months. That single transaction was for US$3.3m worth of shares at a price of US$30.96 each. That means that an insider was selling shares at around the current price of US$30.85. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
Happily, we note that in the last year insiders paid US$510k for 16.01k shares. But insiders sold 183.51k shares worth US$5.7m. All up, insiders sold more shares in Compass Group than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for Compass Group
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Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.06% of Compass Group shares, worth about US$33m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Compass Group Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Compass Group shares in the last quarter. Our analysis of Compass Group insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Compass Group. You'd be interested to know, that we found 1 warning sign for Compass Group and we suggest you have a look.
Of course Compass Group may not be the best stock to buy. So you may wish to see this free collection of high quality 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 of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.