This Cairn Homes Insider Reduced Their Stake By 24%
From what we can see, insiders were net sellers in Cairn Homes plc's (LON:CRN ) during the past 12 months. That is, insiders sold the stock in greater numbers than they purchased it.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Cairn Homes
Over the last year, we can see that the biggest insider sale was by the Co-Founder, Michael Stanley, for UK£6.6m worth of shares, at about UK£1.90 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£2.11. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 24% of Michael Stanley's holding. Michael Stanley was the only individual insider to sell over the last year. Notably Michael Stanley was also the biggest buyer, having purchased UK£444k worth of shares.
Happily, we note that in the last year insiders paid UK£444k for 240.04k shares. But they sold 4.65m shares for UK£8.8m. Michael Stanley divested 4.65m shares over the last 12 months at an average price of €1.90. 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!
Check out our latest analysis for Cairn Homes
I will like Cairn Homes better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 1.8% of Cairn Homes shares, worth about UK£23m. 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 Do The Cairn Homes Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Cairn Homes shares in the last quarter. Our analysis of Cairn Homes 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 Cairn Homes. While conducting our analysis, we found that Cairn Homes has 1 warning sign and it would be unwise to ignore it.
But note: Cairn Homes 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 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.