Insiders who acquired $423,000 of Trinseo PLCs (NYSE:TSE) at an average price of US$29.81 over the past 12 months might be dismayed by the recent 9.3% price drop. Insiders buy in the hope that their investments will increase in value over time. However, due to recent losses, their initial investment is now only worth US$271,000, which is not huge.
While insider trading isn’t the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider trading altogether.
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The last 12 months of insider trading at Trinseo
Independent director Jeffrey Cote made the biggest insider buy in the past 12 months. This single transaction involved US$318,000 of shares at a price of US$31.76 each. Clearly, an insider wanted to buy, even at a price higher than the current stock price (ie US$19.07). It is very possible that they regret the purchase, but it is more likely that they are optimistic about the company. For us, it is very important to consider the price that insiders pay for the shares. It is generally more encouraging if they paid above the current price, as this suggests that they perceived value even at higher levels.
Fortunately, we note that last year insiders paid US$423,000 for 14,190,000 shares. But they sold 6,900 shares for $170,000. Over the past twelve months, there have been more buys than sells by Trinseo insiders. You can see a visual representation of insider trading (by companies and individuals) over the past 12 months, below. By clicking on the graph below, you will be able to see the precise detail of each insider trade!
There are always plenty of stocks that insiders are buying. So if it suits your style you can check each stock one by one or you can take a look at this free list of companies. (Hint: insiders bought them).
Trinseo Insider Ownership
For an ordinary shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely insiders will be incentivized to build the business for the long term. Insiders own 1.0% of Trinseo shares, worth about $6.6 million, according to our data. Overall, this level of property isn’t that impressive, but it’s definitely better than nothing!
What could insider trading at Trinseo tell us?
It doesn’t mean much that no insider has traded Trinseo shares in the last quarter. However, our analysis of transactions over the past year is encouraging. We would like to see larger individual holdings. However, we see nothing to suggest that Trinseo insiders doubt the company. So these insider trades can help us build a thesis on the stock, but it’s also helpful to know the risks this company faces. To help you, we found 2 warning signs that you should scan your eye to get a better picture of Trinseo.
Of course Trinseo may not be the best stock to buy. So you might want to see this free set of high quality companies.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.