Beacon Roofing Supply Insiders Sell US$2.4m Of Stock, Possibly Signalling Caution

The fact that multiple Beacon Roofing Supply, Inc. (NASDAQ:BECN) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Beacon Roofing Supply

Beacon Roofing Supply Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the President, Julian Francis, sold US$964k worth of shares at a price of US$97.91 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$86.13. So it may not tell us anything about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid US$537k for 6.73k shares. On the other hand they divested 26.75k shares, for US$2.4m. All up, insiders sold more shares in Beacon Roofing Supply than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and 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 Beacon Roofing Supply Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Beacon Roofing Supply. Specifically, Executive VP & CFO Prithvi Gandhi bought US$411k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Does Beacon Roofing Supply Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Beacon Roofing Supply insiders own about US$40m worth of shares. That equates to 0.7% of the company. 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 Beacon Roofing Supply Insiders?

It is good to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. The more recent transactions are a positive, but Beacon Roofing Supply insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. Overall they seem reasonably aligned. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 1 warning sign for Beacon Roofing Supply that deserve your attention before buying any shares.

But note: Beacon Roofing Supply 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.