Don't Ignore The Insider Selling In Valmont Industries

We wouldn't blame Valmont Industries, Inc. (NYSE:VMI) shareholders if they were a little worried about the fact that Mogens Bay, the Non-Executive Chairman recently netted about US$5.4m selling shares at an average price of US$316. That sale reduced their total holding by 10% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for Valmont Industries

Valmont Industries Insider Transactions Over The Last Year

Notably, that recent sale by Non-Executive Chairman Mogens Bay was not the only time they sold Valmont Industries shares this year. They previously made an even bigger sale of -US$5.4m worth of shares at a price of US$303 per share. That means that an insider was selling shares at slightly below the current price (US$312). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 9.5% of Mogens Bay's holding.

Insiders in Valmont Industries didn't buy any shares in the last year. 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!

I will like Valmont Industries better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Valmont Industries Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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. Valmont Industries insiders own about US$117m worth of shares (which is 1.9% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Valmont Industries Tell Us?

Insiders haven't bought Valmont 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. On the plus side, Valmont Industries makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Valmont Industries you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.