Even though Steelcase Inc. (NYSE:SCS) stock gained 8.1% last week, insiders who sold US$258k worth of stock over the past year are probably better off. Selling at an average price of US$14.73, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Steelcase
Over the last year, we can see that the biggest insider sale was by the Senior Vice President of EMEA, Guillaume Alvarez, for US$188k worth of shares, at about US$15.02 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$12.89. So it is hard to draw any strong conclusion from it.
Steelcase insiders didn't buy any shares 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Steelcase insiders own 23% of the company, worth about US$339m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Steelcase Insider Transactions Indicate?
The fact that there have been no Steelcase insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Steelcase, we can't say the same about the selling of shares. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 3 warning signs with Steelcase and understanding these should be part of your investment process.
But note: Steelcase 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.
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.
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