We often see insiders buying up shares in companies that perform well over the long term. 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 before you buy or sell Republic Services, Inc. (NYSE:RSG), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
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. 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’.
Republic Services Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Independent Director Ramon Rodriguez for US$541k worth of shares, at about US$66.96 per share. That means that an insider was selling shares at slightly below the current price (US$72.81). While sellers have a variety of reasons for selling, this isn’t particularly great to see. 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 100% of Ramon Rodriguez’s holding.
In total, Republic Services insiders sold more than they bought over the last year. The sellers received a price of around US$67.57, on average. It’s not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Insiders at Republic Services Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Republic Services. We can see that Jennifer Kirk paid US$109k for shares in the company. No-one sold. That shows some optimism about the company’s future.
Does Republic Services Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 0.1% of Republic Services shares, worth about US$33m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Republic Services Insiders?
It is good to see recent insider purchase. But we can’t say the same for the transactions over the last 12 months. The more recent transactions are a positive, but Republic Services insiders haven’t shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. Overall they seem reasonably aligned. 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.
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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 email@example.com.