We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Brady Corporation (NYSE:BRC).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, including certain disclosures.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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.’
The Last 12 Months Of Insider Transactions At Brady
Director Elizabeth Bruno made the biggest insider sale in the last 12 months. That single transaction was for US$1.1m worth of shares at a price of US$43.86 each. So what is clear is that an insider saw fit to sell at around the current price of US$43.56. While their view may have changed since the sale, this is not a particularly positive fact. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at that price.
We note that in the last year insiders divested 57.35k shares for a total of US$2.3m. You can see the insider transactions over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Brady better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Brady Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Brady shares. Specifically, insiders ditched US$1.2m worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the directors think that the shares are a bargain.
Insider Ownership of Brady
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Brady insiders own 9.7% of the company, currently worth about US$221m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Brady Insiders?
Insiders sold stock recently, but they haven’t been buying. Furthermore, transactions over the last twelve months dispel the notion that insiders won’t sell readily. When you consider that most companies have higher levels of insider ownership, we’re a little wary. So we’re not rushing to buy, to say the least. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.