Who Has Been Selling Virco Mfg. Corporation (NASDAQ:VIRC) Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Virco Mfg. Corporation (NASDAQ:VIRC).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

Check out our latest analysis for Virco Mfg

Virco Mfg Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Donald Rudkin, sold US$74k worth of shares at a price of US$2.23 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$2.71. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 63% of Donald Rudkin's stake.

Happily, we note that in the last year insiders paid US$241k for 82.74k shares. On the other hand they divested 82.74k shares, for US$241k. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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. Virco Mfg insiders own 46% of the company, currently worth about US$20m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Virco Mfg Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Virco Mfg insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Virco Mfg. Case in point: We've spotted 3 warning signs for Virco Mfg you should be aware of, and 1 of them can't be ignored.

But note: Virco Mfg 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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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. 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.
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