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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Churchill Downs Incorporated (NASDAQ:CHDN).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Colombia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Check out our latest analysis for Churchill Downs
The Last 12 Months Of Insider Transactions At Churchill Downs
Robert Evans made the biggest insider sale in the last 12 months. That single transaction was for US$8.7m worth of shares at a price of US$265 each. That means that an insider was selling shares at around the current price of US$237. While their view may have changed since the sale, this is not a particularly positive fact. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment. Robert Evans was the only individual insider to sell over the last year.
In the last twelve months insiders purchased 29.05k shares for US$7.2m. But they sold 32.87k for US$8.7m. The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Churchill Downs Insiders Bought Stock Recently
Over the last quarter, Churchill Downs insiders have spent a meaningful amount on shares. Overall, 3 insiders shelled out US$3.4m for shares in the company — and none sold. This is a positive in our book as it implies some confidence.
Does Churchill Downs 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. Churchill Downs insiders own about US$146m worth of shares (which is 4.7% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.