Anyone interested in Clean Harbors, Inc. (NYSE:CLH) should probably be aware that the Independent Director, John Preston, recently divested US$242k worth of shares in the company, at an average price of US$112 each. That sale was 16% of their holding, so it does make us raise an eyebrow.
Clean Harbors Insider Transactions Over The Last Year
The Founder, Alan McKim, 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$110 each. That means that even when the share price was below the current price of US$113, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 1.0% of Alan McKim's stake.
Over the last year we saw more insider selling of Clean Harbors shares, than buying. You can see the insider transactions (by companies and 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!
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Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that Clean Harbors insiders own 7.3% of the company, worth about US$448m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Clean Harbors Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at Clean Harbors, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since Clean Harbors is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 2 warning signs for Clean Harbors (1 can't be ignored) you should be aware of.
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.
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