Should You Be Worried About Insider Transactions At The Greenbrier Companies, Inc. (NYSE:GBX)?

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell The Greenbrier Companies, Inc. (NYSE:GBX), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

See our latest analysis for Greenbrier Companies

The Last 12 Months Of Insider Transactions At Greenbrier Companies

Over the last year, we can see that the biggest insider sale was by Executive VP and Chief Commercial & Leasing Officer Mark Rittenbaum for US$477k worth of shares, at about US$47.68 per share. So we know that an insider sold shares at around the present share price of US$42.59. While their view may have changed since the sale, this is not a particularly positive fact. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.

Over the last year, we note insiders sold 36.30k shares worth US$1.8m. In total, Greenbrier Companies insiders sold more than they bought over the last year. They sold for an average price of about US$49.45. It’s not ideal to see that insiders have sold at around the current price. Since insiders sell for many reasons, we wouldn’t put too much weight on it. The chart below shows insider transactions over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NYSE:GBX Insider Trading December 11th 18
NYSE:GBX Insider Trading December 11th 18

I will like Greenbrier Companies better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders at Greenbrier Companies Have Sold Stock Recently

The last three months saw some Greenbrier Companies insider selling. Mark Rittenbaum only netted US$16k selling shares, in that period. It’s not great to see insider selling, nor the lack of recent buyers. But the selling simply isn’t sufficiently substantial to be of much use as a signal.

Does Greenbrier Companies Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 1.6% of Greenbrier Companies shares, worth about US$22m. 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 Greenbrier Companies Tell Us?

Our data shows a little more insider selling than buying in the last three months. But the net divestment is not enough to concern us at all. Recent sales exacerbate our caution arising from analysis of Greenbrier Companies insider transactions. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Greenbrier Companies.

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

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.