We'd be surprised if City Holding Company (NASDAQ:CHCO) shareholders haven't noticed that the Independent Non-Executive Chairman of the Board, C. Kayser, recently sold US$238k worth of stock at US$133 per share. However, the silver lining is that the sale only reduced their total holding by 6.9%, so we're hesitant to read anything much into it, on its own.
City Holding Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the President, Charles Hageboeck, for US$899k worth of shares, at about US$101 per share. That means that even when the share price was below the current price of US$131, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 14% of Charles Hageboeck's stake.
In total, City Holding insiders sold more than they bought over the last year. 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!
I will like City Holding 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
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 2.3% of City Holding shares, worth about US$43m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The City Holding Insider Transactions Indicate?
Insiders sold City Holding shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! 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. At Simply Wall St, we've found that City Holding has 2 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.
But note: City Holding 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.
