UniFirst Insiders Sold US$8.3m Of Shares Suggesting Hesitancy

The fact that multiple UniFirst Corporation (NYSE:UNF) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for UniFirst

The Last 12 Months Of Insider Transactions At UniFirst

In the last twelve months, the biggest single sale by an insider was when the insider, Cecelia Levenstein, sold US$4.0m worth of shares at a price of US$159 per share. That means that an insider was selling shares at slightly below the current price (US$191). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 25% of Cecelia Levenstein's holding.

UniFirst insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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UniFirst Insiders Are Selling The Stock

Over the last three months, we've seen a bit of insider selling at UniFirst. Independent Director Michael Landoli only netted US$47k selling shares, in that period. It's not great to see insider selling, nor the lack of recent buyers. But the selling simply isn't sufficiently substantial to be of much use as a signal.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. UniFirst insiders own 10% of the company, currently worth about US$358m 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.

What Might The Insider Transactions At UniFirst Tell Us?

While there has not been any insider buying in the last three months, there has been selling. However, the sales are not big enough to concern us at all. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of UniFirst insider transactions don't fill us with confidence. Of course, the future is what matters most. So if you are interested in UniFirst, you should check out this free report on analyst forecasts for the company.

But note: UniFirst 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 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.