Many Corteva, Inc. (NYSE:CTVA) insiders ditched their stock over the past year, which may be of interest to the company’s shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
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In the last twelve months, the biggest single sale by an insider was when the CEO & Director, Charles Magro, sold US$3.0m worth of shares at a price of US$63.82 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$67.47. 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 26% of Charles Magro’s stake.
In the last year Corteva insiders didn’t buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Check out our latest analysis for Corteva
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Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.1% of Corteva shares, worth about US$58m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
It doesn’t really mean much that no insider has traded Corteva shares in the last quarter. Still, the insider transactions at Corteva in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. Of course, the future is what matters most. So if you are interested in Corteva, you should check out this free report on analyst forecasts for the company.