BlueLinx Holdings Inc. (NYSE:BXC) insiders sold US$3.3m worth of stock last year which shareholders may not want to overlook

Simply Wall St
February 21, 2022
Source: Shutterstock

While BlueLinx Holdings Inc. (NYSE:BXC) shareholders have had a good week with the stock up 8.4%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell US$3.3m worth of stock in the past 12 months. This could be a sign of impending weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for BlueLinx Holdings

The Last 12 Months Of Insider Transactions At BlueLinx Holdings

In the last twelve months, the biggest single sale by an insider was when the Chief Administrative Officer, Shyam Reddy, sold US$2.2m worth of shares at a price of US$61.71 per share. That means that even when the share price was below the current price of US$85.71, an insider wanted to cash in some shares. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 100% of Shyam Reddy's stake.

Over the last year we saw more insider selling of BlueLinx Holdings shares, than buying. The chart below shows insider transactions (by companies and 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!

NYSE:BXC Insider Trading Volume February 21st 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does BlueLinx Holdings Boast High Insider Ownership?

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. BlueLinx Holdings insiders own about US$16m worth of shares. That equates to 1.9% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The BlueLinx Holdings Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by BlueLinx Holdings insiders. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing BlueLinx Holdings. Case in point: We've spotted 4 warning signs for BlueLinx Holdings you should be aware of, and 2 of them are a bit unpleasant.

Of course BlueLinx Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.