The recent drop in market capitalization of The Children’s Place, Inc. (NASDAQ:PLCE) of US$105 million means a loss of US$39,000 for insiders who bought this year
The recent drop of 16% The Children’s Place, Inc. (NASDAQ:PLCE) The shares could be a blow to insiders who bought $230,000 worth of shares at an average purchase price of $48.84 over the past 12 months. This is not good because insiders invest based on expectations that their money will appreciate over time. However, following recent losses, their original investment is now worth just US$190,000.
Although we would never suggest that investors base their decisions solely on what a company’s directors have done, logic dictates that you pay attention to whether insiders are buying or selling shares.
See our latest analysis for Children’s Place
The last 12 months of insider trading at Children’s Place
Independent director John Bachman made the biggest insider buy in the past 12 months. This single transaction was for US$122,000 of shares at a price of US$48.83 each. Clearly, an insider wanted to buy, even at a price higher than the current stock price (ie US$40.47). Their perspective may have changed since then, but it at least shows that they were feeling optimistic at the time. For us, it is very important to consider the price that insiders pay for the shares. It is generally more encouraging if they paid above the current price, as this suggests that they perceived value even at higher levels.
Fortunately, we note that last year insiders paid US$230,000 for 4.70,000 shares. On the other hand, they sold 1.07k shares, for 104k USD. Overall, Children’s Place insiders have been net buyers over the past year. You can see a visual representation of insider trading (by companies and individuals) over the past 12 months, below. By clicking on the graph below, you will be able to see the precise detail of each insider trade!
There are always plenty of stocks that insiders are buying. So if it suits your style you can check each stock one by one or you can take a look at this free list of companies. (Hint: insiders bought them).
Children’s Place Insiders Recently Bought Stock
Over the past quarter, Children’s Place insiders have spent a significant amount on stocks. In total, insiders bought US$230,000 worth of stock at that time, and we had no sales. This could be interpreted as suggesting a positive outlook.
Does Children’s Place boast of being owned by insiders?
Another way to test alignment between a company’s executives and other shareholders is to look at how many shares they own. I think it’s a good sign if insiders have a significant number of shares in the company. Insiders own 4.9% of Children’s Place stock, worth approximately $27 million. This level of insider ownership is good, but just short of being particularly noteworthy. This certainly suggests a reasonable degree of alignment.
What could insider trading at Children’s Place tell us?
Recent insider buying is encouraging. And longer-term insider trading also gives us confidence. Insiders likely see value in Children’s Place stock, given these transactions (as well as notable insider ownership of the company). While we like to know what’s going on with insider ownership and trading, we also make sure to consider the risks a stock faces before making any investment decisions. Example: we have identified 3 warning signs for Children’s Place you should be aware, and one of them doesn’t sit well with us.
But note: Children’s Place may not be the best stock to buy. So take a look at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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