Even though Tredegar Corporation (NYSE:TG) has fallen by 28% over the past week , insiders who sold US$310k worth of stock over the past year have had less luck. The average selling price of US$8.00 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Tredegar Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, William Gottwald, for US$268k worth of shares, at about US$8.03 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$5.39. So it may not tell us anything about how insiders feel about the current share price.
Over the last year we saw more insider selling of Tredegar shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for Tredegar
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Tredegar Insiders Are Selling The Stock
We've seen more insider selling than insider buying at Tredegar recently. We note insider William Gottwald cashed in US$268k worth of shares. On the flip side, CEO, President & Director Arijit DasGupta spent US$24k on purchasing shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
Insider Ownership Of Tredegar
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. We usually like to see fairly high levels of insider ownership. Insiders own 16% of Tredegar shares, worth about US$37m. 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 Tredegar Insider Transactions Indicate?
The stark truth for Tredegar is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Tredegar is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 2 warning signs for Tredegar (of which 1 is significant!) you should know about.
But note: Tredegar 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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