Those following along with GMS Inc. (NYSE:GMS) will no doubt be intrigued by the recent purchase of shares by Ronald Ross, Independent Director of the company, who spent a stonking US$1.2m on stock at an average price of US$11.17. Not only is that a big swing, but it increased their holding size by 43%, which is definitely great to see.
View our latest analysis for GMS
The Last 12 Months Of Insider Transactions At GMS
In fact, the recent purchase by Ronald Ross was the biggest purchase of GMS shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of US$15.15. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today’s share price, as the discount to value may have narrowed with the rising price. In this case we’re pleased to report that the insider purchases were made at close to current prices.
Happily, we note that in the last year insiders paid US$1.3m for 111.89k shares. But they sold 33051 shares for US$769k. Overall, GMS insiders were net buyers last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. It appears that GMS insiders own 2.5% of the company, worth about US$16m. 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 GMS Insiders?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in GMS shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. For example, GMS has 2 warning signs (and 1 which can’t be ignored) we think you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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