TopBuild Insiders Sell US$6.5m Of Stock, Possibly Signalling Caution

Many TopBuild Corp. (NYSE:BLD) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. 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, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for TopBuild

TopBuild Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO, President & Director, Robert Buck, for US$1.4m worth of shares, at about US$302 per share. So what is clear is that an insider saw fit to sell at around the current price of US$296. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

In the last year TopBuild insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart 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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Insiders At TopBuild Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at TopBuild. In total, President of TruTeam Operations Steven Raia sold US$286k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of TopBuild

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.6% of TopBuild shares, worth about US$55m. 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 TopBuild Insiders?

An insider sold TopBuild shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. On the plus side, TopBuild makes money, and is growing profits. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. Of course, the future is what matters most. So if you are interested in TopBuild, you should check out this free report on analyst forecasts for the company.

Of course TopBuild may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.