Yahoo Finance Insiders At Coca-Cola Sold US$17m In Stock, Alluding To Potential Weakness
The fact that multiple The Coca-Cola Company (NYSE:KO) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
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 Coca-Cola
Coca-Cola Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Chairman & CEO, James Robert Quincey, for US$15m worth of shares, at about US$60.94 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$62.93. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower 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 33% of James Robert Quincey's stake.
Coca-Cola insiders didn't buy any shares over the last year. 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!
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Coca-Cola Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Coca-Cola. In total, Executive VP and Global Chief Technical & Innovation Officer Nancy Quan dumped US$1.2m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Does Coca-Cola Boast High Insider Ownership?
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. It's great to see that Coca-Cola insiders own 0.7% of the company, worth about US$1.8b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Coca-Cola Insiders?
An insider hasn't bought Coca-Cola stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But since Coca-Cola is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. While conducting our analysis, we found that Coca-Cola has 2 warning signs and it would be unwise to ignore these.
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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.