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.
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Beacon Roofing Supply
Over the last year, we can see that the biggest insider purchase was by Independent Director Richard Frost for US$502k worth of shares, at about US$42.58 per share. So it’s clear an insider wanted to buy, even at a higher price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. It’s not at all bad to see insiders buy shares at or above current prices.
Happily, we note that in the last year insiders bought 67.82k shares for a total of US$2.3m. Overall, Beacon Roofing Supply insiders were net buyers last year. The average buy price was around US$33.99. Although they bought at below the recent price of US$34.74 per share, it is good to see that insiders are willing to invest in the company. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Beacon Roofing Supply Have Bought Stock Recently
It’s good to see that Beacon Roofing Supply insiders have made notable investments in the company’s shares. In total, insiders bought US$1.5m worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.
Does Beacon Roofing Supply Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Beacon Roofing Supply insiders own 0.6% of the company, worth about US$14m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Beacon Roofing Supply Tell Us?
It’s certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Beacon Roofing Supply we think they are probably pretty confident of a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Beacon Roofing Supply.
Of course Beacon Roofing Supply may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.