We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in SYNNEX Corporation (NYSE:SNX).
Do Insider Transactions Matter?
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, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
View our latest analysis for SYNNEX
SYNNEX Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Chairman of the Board, Kevin Murai, for US$474k worth of shares, at about US$78.5 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$97.11. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can’t be sure if it does mean insiders think the shares are fully valued, so it’s only a weak sign. It is worth noting that this sale was only 398% of Kevin Murai’s holding.
Over the last year we saw more insider selling of SYNNEX shares, than buying. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Insiders at SYNNEX Have Sold Stock Recently
Over the last three months, we’ve seen a bit of insider selling at SYNNEX. Lead Independent Director Dwight Steffensen sold just US$37k worth of shares in that time. It’s not great to see insider selling, nor the lack of recent buyers. But the selling simply isn’t sufficiently substantial to be of much use as a signal.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 1.9% of SYNNEX shares, worth about US$95m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About SYNNEX Insiders?
We did not see any insider buying in the last three months, but we did see selling. However, the sales are not big enough to concern us at all. It’s hard to get a picture of how insiders are feeling from their transactions, in this case. We’re not overly impressed by the insider ownership and it’d be good if they bought some SYNNEX stock. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for SYNNEX.
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, but not derivative transactions.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.