Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Fastenal Company (NASDAQ:FAST), that sends out a positive message to the company's shareholders.
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.
Fastenal Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Director Michael Ancius for US$204k worth of shares, at about US$46.00 per share. We do like to see buying, but this purchase was made at well below the current price of US$62.00. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Happily, we note that in the last year insiders paid US$779k for 16.34k shares. But insiders sold 1.03k shares worth US$55k. In total, Fastenal insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Fastenal 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.
Fastenal Insiders Bought Stock Recently
At Fastenal,over the last quarter, we have observed quite a lot more insider buying than insider selling. Insiders spent US$123k on shares. But Senior Executive Vice President of Information Technology John Soderberg sold shares worth US$27k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Insider Ownership of Fastenal
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Fastenal insiders own 0.4% of the company, worth about US$125m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Fastenal Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Fastenal insiders are well aligned, and quite possibly think the share price is too low. Looks promising! 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. You'd be interested to know, that we found 1 warning sign for Fastenal and we suggest you have a look.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.