Yahoo Finance Should You Take Comfort From Insider Transactions At Chico's FAS, Inc. (NYSE:CHS)?
It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Chico's FAS, Inc. (NYSE:CHS), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia 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'.
View our latest analysis for Chico's FAS
Chico's FAS Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Executive Chairman Bonnie Brooks for US$100k worth of shares, at about US$1.30 per share. Even though the purchase was made at a significantly lower price than the recent price (US$3.21), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months Chico's FAS insiders were buying shares, but not selling. 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!
Chico's FAS is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Chico's FAS
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 3.0% of Chico's FAS shares, worth about US$12m. 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 Does This Data Suggest About Chico's FAS Insiders?
It doesn't really mean much that no insider has traded Chico's FAS shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Chico's FAS and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Chico's FAS. Our analysis shows 3 warning signs for Chico's FAS (2 shouldn't be ignored!) and we strongly recommend you look at them before investing.
Of course Chico's FAS may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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, but not derivative transactions.
This article by Simply Wall St is general in nature. 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.
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