We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Brady Corporation (NYSE:BRC), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
Brady Insider Transactions Over The Last Year
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. That means that an insider was selling shares at slightly below the current price (US$47.37). Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. As a general rule we consider it to be discouraging when insiders are selling below the current price. We note that the biggest single sale was only 2% of Elizabeth Bruno’s holding.
In the last twelve months insiders netted US$2.3m for 56.70k shares sold. Over the last year we saw more insider selling of Brady shares, than buying. They sold for an average price of about US$40.80. It’s not particularly great to see insiders were selling shares around current prices. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at Brady Have Sold Stock Recently
The last quarter saw substantial insider selling of Brady shares. Specifically, Director Frank Harris ditched US$96k 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.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that Brady insiders own 9.6% of the company, worth about US$240m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Brady Insiders?
An insider sold stock recently, but they haven’t been buying. Looking to the last twelve months, our data doesn’t show any insider buying. On the plus side, Brady makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in Brady, you should check out this free report on analyst forecasts for the company.
Of course Brady 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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