Insider Buying: Quanex Building Products Independent Director Bought US$99k Of Shares

Even if it's not a huge purchase, we think it was good to see that Bradley Hughes, the Independent Director of Quanex Building Products Corporation (NYSE:NX) recently shelled out US$99k to buy stock, at US$15.27 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

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The Last 12 Months Of Insider Transactions At Quanex Building Products

Over the last year, we can see that the biggest insider purchase was by President George Wilson for US$100k worth of shares, at about US$23.03 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$13.74). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months Quanex Building Products insiders were buying shares, but not selling. Their average price was about US$18.56. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Quanex Building Products

Quanex Building Products is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Quanex Building Products insiders own about US$7.0m worth of shares (which is 1.1% of the company). We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Quanex Building Products Insiders?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Quanex Building Products insiders are reasonably well aligned, and optimistic for the future. 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. For instance, we've identified 2 warning signs for Quanex Building Products (1 is a bit unpleasant) you should be aware of.

Of course Quanex Building Products 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.