We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Twin Disc, Incorporated (NASDAQ:TWIN).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
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Twin Disc Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the , Malcolm Moore, sold US$54k worth of shares at a price of US$18.00 per share. So what is clear is that an insider saw fit to sell at around the current price of US$15.36. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn’t a major concern, though it’s hardly a good sign. Malcolm Moore was the only individual insider to sell over the last year.
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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Twin Disc
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 Twin Disc insiders own 23% of the company, worth about US$46m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Twin Disc Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. Our analysis of Twin Disc insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in Twin Disc, you should check out this free report on analyst forecasts for the company.
Of course Twin Disc may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.