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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 before you buy or sell Beacon Roofing Supply, Inc. (NASDAQ:BECN), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 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.’
Beacon Roofing Supply Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Richard Frost bought US$502k worth of shares at a price of US$42.58 per share. That means that an insider was happy to buy shares at above the current price of US$38.87. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders paid US$2.3m for 67815 shares purchased. While Beacon Roofing Supply insiders bought shares last year, they didn’t sell. They paid about US$33.99 on average. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price. 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!
Beacon Roofing Supply is not the only stock that insiders are buying. 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 Beacon Roofing Supply
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Beacon Roofing Supply insiders own 0.6% 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 Do The Beacon Roofing Supply Insider Transactions Indicate?
The fact that there have been no Beacon Roofing Supply insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Beacon Roofing Supply and their transactions don’t cause us concern. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Beacon Roofing Supply.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 email@example.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.