Don’t Ignore The Insider Selling In Constellation Software

We wouldn’t blame Constellation Software Inc. (TSE:CSU) shareholders if they were a little worried about the fact that Mark Leonard, the Founder recently netted about CA$23m selling shares at an average price of CA$3,764. However, that sale only accounted for 1.4% of their holding, so arguably it doesn’t say much about their conviction.

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The Last 12 Months Of Insider Transactions At Constellation Software

Notably, that recent sale by Mark Leonard was the biggest insider sale of Constellation Software shares that we’ve seen in the last year. So what is clear is that an insider sees fit to sell at around the current price of CA$3,751. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Over the last year we saw more insider selling of Constellation Software shares, than buying. You can see the insider transactions (by companies and 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!

insider-trading-volume
TSX:CSU Insider Trading Volume March 18th 2024

I would like Constellation Software better if I saw some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership Of Constellation Software

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Constellation Software insiders own about CA$5.5b worth of shares (which is 6.9% of the company). Most shareholders would be happy to see this kind of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Constellation Software Insiders?

An insider hasn’t bought Constellation Software stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn’t give us much comfort. But since Constellation Software is profitable and growing, we’re not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Constellation Software. Every company has risks, and we’ve spotted them 2 warning signs for Constellation Software you should know about.

If you would prefer to check out another company — one with potentially superior financials — then don’t 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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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.

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