The fact that multiple Central Garden & Pet Company (NASDAQ:CENT) 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 do think it is perfectly logical to keep tabs on what insiders are doing.

Central Garden & Pet Insider Transactions Over The Last Year

The Director, Brooks Pennington, made the biggest insider sale in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$45.64 each. So we know that an insider sold shares at around the present share price of US$43.22. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

In the last year Central Garden & Pet insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Insiders At Central Garden & Pet Have Sold Stock Recently

Over the last three months, we've seen a bit of insider selling at Central Garden & Pet. Independent Director John Ranelli only netted US$17k selling shares, in that period. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.

Insider Ownership Of Central Garden & Pet

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Central Garden & Pet insiders own 9.5% of the company, currently worth about US$233m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Central Garden & Pet Tell Us?

While there has not been any insider buying in the last three months, there has been selling. However, the sales are not big enough to concern us at all. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Central Garden & Pet insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Central Garden & Pet. You'd be interested to know, that we found 1 warning sign for Central Garden & Pet and we suggest you have a look.

But note: Central Garden & Pet 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.