We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Standex International Corporation (NYSE:SXI).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Standex International Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when VP, CFO & Treasurer Thomas DeByle sold US$220k worth of shares at a price of US$110 per share. That is hardly a positive sign, even though it took place above the latest price (US$73.40). So it may not shed much light on insider confidence at current levels.
Over the last year, we note insiders sold 4.80k shares worth US$504k. In total, Standex International insiders sold more than they bought over the last year. They sold for an average price of about US$105. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of US$73.40. You can see a visual depiction of insider transactions (by 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!
I will like Standex International better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership of Standex International
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Standex International insiders own 1.8% of the company, worth about US$17m. 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 Does This Data Suggest About Standex International Insiders?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. Our analysis of Standex International insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in Standex International, you should check out this free report on analyst forecasts for the company.
Of course Standex International may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.