We wouldn't blame The Coca-Cola Company (NYSE:KO) shareholders if they were a little worried about the fact that James Robert Quincey, the Chairman & CEO recently netted about US$10m selling shares at an average price of US$71.01. That sale reduced their total holding by 27% which is hardly insignificant, but far from the worst we've seen.
Check out our latest analysis for Coca-Cola
Notably, that recent sale by James Robert Quincey is the biggest insider sale of Coca-Cola shares that we've seen in the last year. So we know that an insider sold shares at around the present share price of US$70.87. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
In the last year Coca-Cola insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Coca-Cola better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
For a common shareholder, it is worth checking how many shares are held by company 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 Coca-Cola insiders own 0.7% of the company, worth about US$2.0b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
Insiders sold Coca-Cola shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Coca-Cola. Our analysis shows 3 warning signs for Coca-Cola (1 is potentially serious!) and we strongly recommend you look at them before investing.
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.
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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