Yahoo Finance Did Bright Horizons Family Solutions Inc. (NYSE:BFAM) Insiders Sell Shares?
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 we'll take a look at whether insiders have been buying or selling shares in Bright Horizons Family Solutions Inc. (NYSE:BFAM).
What Is Insider Selling?
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 don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Check out our latest analysis for Bright Horizons Family Solutions
The Last 12 Months Of Insider Transactions At Bright Horizons Family Solutions
In the last twelve months, the biggest single sale by an insider was when the Executive Chairman of the Board, David Lissy, sold US$4.7m worth of shares at a price of US$125 per share. That means that even when the share price was below the current price of US$128, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 10.4% of David Lissy's stake.
Over the last year, we note insiders sold 38525 shares worth US$4.8m. Bright Horizons Family Solutions insiders didn't buy any shares over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Bright Horizons Family Solutions Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Bright Horizons Family Solutions shares. In total, insiders sold US$4.8m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of Bright Horizons Family Solutions
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. It's great to see that Bright Horizons Family Solutions insiders own 1.4% of the company, worth about US$103m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Bright Horizons Family Solutions Insider Transactions Indicate?
Insiders haven't bought Bright Horizons Family Solutions stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. On the plus side, Bright Horizons Family Solutions makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. Of course, the future is what matters most. So if you are interested in Bright Horizons Family Solutions, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
