Even though The Kroger Co. (NYSE:KR) stock gained 5.4% last week, insiders who sold US$14m worth of stock over the past year are probably better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$53.02, which is higher than the current price, may have been the best decision.
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.
View our latest analysis for Kroger
Kroger Insider Transactions Over The Last Year
The Senior VP and Chief Merchant & Marketing Officer, Stuart Aitken, made the biggest insider sale in the last 12 months. That single transaction was for US$2.9m worth of shares at a price of US$55.75 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$48.70). So it is hard to draw any strong conclusion from it.
In the last year Kroger insiders didn't buy any company stock. 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:KR Insider Trading Volume June 28th 2022
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).
Kroger Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Kroger. In total, Senior Vice President of Human Resources & Labor Relations Timothy Massa sold US$2.0m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Kroger insiders own about US$305m worth of shares (which is 0.9% of the company). 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 Does This Data Suggest About Kroger Insiders?
An insider sold Kroger shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since Kroger is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Kroger has 4 warning signs we think you should be aware of.
Of course Kroger 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.
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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.