Stock Analysis

Insiders of Beacon Roofing Supply, Inc. (NASDAQ:BECN) must have made a tidy sum after selling stock currently worth US$54.72 at US$62.34

  •  Updated
NasdaqGS:BECN
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Beacon Roofing Supply, Inc.'s (NASDAQ:BECN) stock rose 4.8% last week, but insiders who sold US$143k worth of stock over the last year are probably in a more advantageous position. Selling at an average price of US$62.34, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Before we look at these insider transactions though, you might like to know that our analysis indicates that BECN is potentially undervalued!

Beacon Roofing Supply Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, James Gosa, for US$143k worth of shares, at about US$62.34 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$54.72. So it may not shed much light on insider confidence at current levels. James Gosa was the only individual insider to sell shares in the last twelve months.

You can see a visual depiction of insider transactions (by companies and 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!

insider-trading-volume
NasdaqGS:BECN Insider Trading Volume October 3rd 2022

I will like Beacon Roofing Supply better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership Of Beacon Roofing Supply

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Beacon Roofing Supply insiders own about US$19m worth of shares. That equates to 0.5% 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 Do The Beacon Roofing Supply Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Beacon Roofing Supply shares in the last quarter. Still, the insider transactions at Beacon Roofing Supply in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 1 warning sign for Beacon Roofing Supply you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

What are the risks and opportunities for Beacon Roofing Supply?

Beacon Roofing Supply, Inc., together with its subsidiaries, distributes residential and non-residential roofing materials, and complementary building products to contractors, home builders, building owners, lumberyards, and retailers.

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Rewards

  • Trading at 37.8% below our estimate of its fair value

  • Earnings grew by 104.2% over the past year

Risks

  • Earnings are forecast to decline by an average of 0.06% per year for the next 3 years

  • Debt is not well covered by operating cash flow

View all Risks and Rewards

Share Price

Market Cap

1Y Return

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Further research on
Beacon Roofing Supply

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About NasdaqGS:BECN

Beacon Roofing Supply

Beacon Roofing Supply, Inc., together with its subsidiaries, distributes residential and non-residential roofing materials, and complementary building products to contractors, home builders, building owners, lumberyards, and retailers.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation6
Future Growth0
Past Performance6
Financial Health3
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Very undervalued with outstanding track record.