Insiders At Colgate-Palmolive Sold US$3.0m In Stock, Alluding To Potential Weakness

The fact that multiple Colgate-Palmolive Company (NYSE:CL) 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 is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Colgate-Palmolive Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Group President of Europe & Developing Markets, Panagiotis Tsourapas, for US$1.9m worth of shares, at about US$93.30 per share. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$93.49. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 25% of Panagiotis Tsourapas's holding.

Colgate-Palmolive 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!

View our latest analysis for Colgate-Palmolive

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Colgate-Palmolive Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Colgate-Palmolive shares. In total, Chief Human Resources Officer Sally Massey sold US$736k 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 Colgate-Palmolive Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Colgate-Palmolive insiders own 0.09% of the company, worth about US$66m. 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 Colgate-Palmolive Insider Transactions Indicate?

An insider sold Colgate-Palmolive shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Colgate-Palmolive makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Colgate-Palmolive. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Colgate-Palmolive.

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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.