Insteel Industries, Inc.'s (NYSE:IIIN)) market cap declines to US$736m but insiders who sold US$1.0m stock were able to hedge their losses

By
Simply Wall St
Published
December 14, 2021
NYSE:IIIN
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling US$1.0m worth of Insteel Industries, Inc. (NYSE:IIIN) stock at an average sell price of US$40.83 during the past year. The company's market worth decreased by US$52m over the past week after the stock price dropped 6.6%, although insiders were able to minimize their losses

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Insteel Industries

Insteel Industries Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the President, Howard Woltz, sold US$418k worth of shares at a price of US$41.83 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$37.91. So it is hard to draw any strong conclusion from it.

In the last year Insteel Industries 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NYSE:IIIN Insider Trading Volume December 14th 2021

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

Insiders at Insteel Industries Have Sold Stock Recently

The last three months saw significant insider selling at Insteel Industries. In total, VP, Chief Accounting Officer & Corporate Controller Scot Jafroodi dumped US$135k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

Many investors like to check how much of a company is owned by 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. Insteel Industries insiders own about US$30m worth of shares. That equates to 4.1% of the company. 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 Insteel Industries Insider Transactions Indicate?

An insider hasn't bought Insteel Industries stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Insteel Industries is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Be aware that Insteel Industries is showing 2 warning signs in our investment analysis, and 1 of those is concerning...

But note: Insteel Industries 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, but not derivative transactions.

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