Stock Analysis

Don't Ignore The Fact That This Insider Just Sold Some Shares In IES Holdings, Inc. (NASDAQ:IESC)

  •  Updated
NasdaqGM:IESC
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We wouldn't blame IES Holdings, Inc. (NASDAQ:IESC) shareholders if they were a little worried about the fact that Todd Cleveland, the Independent Director recently netted about US$1.0m selling shares at an average price of US$52.34. That sale reduced their total holding by 12% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for IES Holdings

The Last 12 Months Of Insider Transactions At IES Holdings

The insider, Gary Matthews, made the biggest insider sale in the last 12 months. That single transaction was for US$1.2m worth of shares at a price of US$30.00 each. That means that an insider was selling shares at slightly below the current price (US$48.08). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower 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. This single sale was 54% of Gary Matthews's stake. Notably Gary Matthews was also the biggest buyer, having purchased US$59k worth of shares.

All up, insiders sold more shares in IES Holdings 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NasdaqGM:IESC Insider Trading Volume March 16th 2021

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Insider Ownership of IES Holdings

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 2.7% of IES Holdings shares, worth about US$27m. 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 IES Holdings Insider Transactions Indicate?

An insider hasn't bought IES Holdings stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But since IES Holdings is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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. Our analysis shows 2 warning signs for IES Holdings (1 makes us a bit uncomfortable!) and we strongly recommend you look at these before investing.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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What are the risks and opportunities for IES Holdings?

IES Holdings, Inc. designs and installs integrated electrical and technology systems, and provides infrastructure products and services in the United States.

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Rewards

  • Price-To-Earnings ratio (21.7x) is below the Construction industry average (21.9x)

Risks

  • Profit margins (1.7%) are lower than last year (4%)

  • Large one-off items impacting financial results

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