We often see insiders buying up shares in companies that perform well over the long term. Unfortunately,staud wells maxi dress there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in

Churchill Downs Incorporated

(

NASDAQ:CHDN

).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Colombia University

study

found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.

Check out our latest analysis for Churchill Downs

The Last 12 Months Of Insider Transactions At Churchill Downs

Robert Evans made the biggest insider sale in the last 12 months. That single transaction was for US$8.7m worth of shares at a price of US$265 each. That means that an insider was selling shares at around the current price of US$237. While their view may have changed since the sale, this is not a particularly positive fact. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment. Robert Evans was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 29.05k shares for US$7.2m. But they sold 32.87k for US$8.7m. The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

NasdaqGS:CHDN Insider Trading January 1st 19

If you like to buy stocks alongside management, then you might just love this

free

list of companies. (Hint: insiders have been buying them).

Churchill Downs Insiders Bought Stock Recently

Over the last quarter, Churchill Downs insiders have spent a meaningful amount on shares. Overall, 3 insiders shelled out US$3.4m for shares in the company — and none sold. This is a positive in our book as it implies some confidence.

Does Churchill Downs Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Churchill Downs insiders own about US$146m worth of shares (which is 4.7% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

Story continues

So What Do The Churchill Downs Insider Transactions Indicate?

It is good to see recent purchasing. On the other hand the transaction history, over the last year, isn’t so positive. Overall, we’d prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, Churchill Downs insiders are reasonably well aligned, and optimistic for the future. 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

.

Of course

Churchill Downs may not be the best stock to buy

. So you may wish to see this

free

collection of high quality companies.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at

[email protected]

.

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