Have Builders FirstSource Insiders Been Selling Stock?

We wouldn't blame Builders FirstSource, Inc. (NYSE:BLDR) shareholders if they were a little worried about the fact that Cleveland Christophe, the Independent Director recently netted about US$1.8m selling shares at an average price of US$178. That sale reduced their total holding by 24% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Builders FirstSource

The Last 12 Months Of Insider Transactions At Builders FirstSource

The Independent Director, Craig Steinke, made the biggest insider sale in the last 12 months. That single transaction was for US$4.6m worth of shares at a price of US$154 each. That means that even when the share price was below the current price of US$184, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 24% of Craig Steinke's stake.

In the last year Builders FirstSource insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Builders FirstSource better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Builders FirstSource

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Builders FirstSource insiders own about US$458m worth of shares (which is 2.2% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Builders FirstSource Tell Us?

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Builders FirstSource you should be aware of.

But note: Builders FirstSource may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 of direct interests only, but not derivative transactions or indirect interests.

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