Insiders At Beacon Roofing Supply Sold US$1.5m In Stock, Alluding To Potential Weakness

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 versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Beacon Roofing Supply

The Last 12 Months Of Insider Transactions At Beacon Roofing Supply

Over the last year, we can see that the biggest insider sale was by the Independent Non-Executive Chairman & Lead Independent Director, Stuart Randle, for US$746k worth of shares, at about US$72.43 per share. That means that an insider was selling shares at slightly below the current price (US$97.04). 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. We note that the biggest single sale was only 25% of Stuart Randle's holding.

All up, insiders sold more shares in Beacon Roofing Supply than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.7% of Beacon Roofing Supply shares, worth about US$44m. 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?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Beacon Roofing Supply insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Beacon Roofing Supply. You'd be interested to know, that we found 1 warning sign for Beacon Roofing Supply and we suggest you have a look.

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.