For Cairn Homes Insiders, Selling €8.0m Of Shares Was A Smart Move

Even though Cairn Homes plc (LON:CRN) stock gained 10% last week, insiders who sold €8.0m worth of stock over the past year are probably better off. Selling at an average price of €0.84, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Cairn Homes

The Last 12 Months Of Insider Transactions At Cairn Homes

In the last twelve months, the biggest single sale by an insider was when the Co-Founder & Non-Executive Director, Alan McIntosh, sold UK£8.0m worth of shares at a price of UK£0.84 per share. So we know that an insider sold shares at around the present share price of UK£0.84. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn’t a major concern, though it’s hardly a good sign.

All up, insiders sold more shares in Cairn Homes than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders At Cairn Homes Have Sold Stock Recently

The last three months saw significant insider selling at Cairn Homes. In total, Co-Founder & Non-Executive Director Alan McIntosh dumped UK£8.0m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Cairn Homes Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Cairn Homes insiders own about UK£38m worth of shares. That equates to 6.6% of the company. 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?

An insider hasn’t bought Cairn Homes stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn’t give us much comfort. On the plus side, Cairn Homes makes money, and is growing profits. Insiders own shares, but we’re still pretty cautious, given the history of sales. So we’d only buy after careful consideration. 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. Case in point: We’ve spotted 2 warning signs for Cairn Homes 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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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.