We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, 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 Acuity Brands, Inc. (NYSE:AYI).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the 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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.
Acuity Brands Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Independent Director, Ray Robinson, for US$308k worth of shares, at about US$130 per share. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. It’s of some comfort that this sale was conducted at a price well above the current share price, which is US$90.48. So it is hard to draw any strong conclusion from it.
Acuity Brands insiders didn’t buy any shares over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Acuity Brands
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. We usually like to see fairly high levels of insider ownership. It appears that Acuity Brands insiders own 1.1% of the company, worth about US$41m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Acuity Brands Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Acuity Brands shares in the last quarter. We don’t take much encouragement from the transactions by Acuity Brands insiders. But we do like the fact that insiders own a fair chunk of the company. While we like knowing what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we’ve discovered 1 warning sign that you should run your eye over to get a better picture of Acuity Brands.
But note: Acuity Brands may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.
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This article by Simply Wall St is general in nature. 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. Thank you for reading.