We often see insiders buying up shares in companies that perform well over the long term. 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 United Rentals, Inc. (NYSE:URI).
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.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
The Last 12 Months Of Insider Transactions At United Rentals
In the last twelve months, the biggest single sale by an insider was when the Non-Executive Chairman, Michael Kneeland, sold US$5.2m worth of shares at a price of US$151 per share. So what is clear is that an insider saw fit to sell at around the current price of US$151. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it’s not too bad (but it’s still not a positive).
Happily, we note that in the last year insiders paid US$842k for 7.24k shares. But they sold 101963 for US$15m. Over the last year we saw more insider selling of United Rentals shares, than buying. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at United Rentals Have Sold Stock Recently
Over the last three months, we’ve seen significant insider selling at United Rentals. Specifically, insiders ditched US$8.9m worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the insiders think that the shares are a bargain.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that United Rentals insiders own 0.4% of the company, worth about US$44m. 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 Does This Data Suggest About United Rentals Insiders?
Insiders sold United Rentals shares recently, but they didn’t buy any. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’re in no rush to buy! Of course, the future is what matters most. So if you are interested in United Rentals, you should check out this free report on analyst forecasts for the company.
Of course United Rentals may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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