A number of Kennametal Inc. (NYSE:KMT) insiders sold their shares in the last year, which may have raised concerns among investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Kennametal
In the last twelve months, the biggest single sale by an insider was when the Independent Director, Cynthia Davis, sold US$292k worth of shares at a price of US$25.50 per share. That means that an insider was selling shares at around the current price of US$24.02. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
Insiders in Kennametal didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
NYSE:KMT Insider Trading Volume March 15th 2024
I will like Kennametal better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Kennametal Insiders Are Selling The Stock
Over the last three months, we've seen a bit of insider selling at Kennametal. VP of Finance & Corporate Controller John Witt divested only US$26k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the selling simply isn't sufficiently substantial to be of much use as a signal.
Insider Ownership Of Kennametal
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 1.1% of Kennametal shares, worth about US$22m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Kennametal Tell Us?
While there has not been any insider buying in the last three months, there has been selling. However, the sales are not big enough to concern us at all. We're a little cautious about the insider selling at Kennametal. But we do like the fact that insiders own a fair chunk of the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Kennametal may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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