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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in Texas Roadhouse, Inc. (NASDAQ:TXRH).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 it is perfectly logical to keep tabs on what insiders are doing. 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’.
Texas Roadhouse Insider Transactions Over The Last Year
Independent Director James Zarley made the biggest insider purchase in the last 12 months. That single transaction was for US$992k worth of shares at a price of US$52.51 each. That implies that an insider found the current price of US$55.48 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today’s share price, as the discount to value may have narrowed with the rising price. Happily, the Texas Roadhouse insider decided to buy shares at close to current prices. The only individual insider to buy over the last year was James Zarley.
All up, insiders sold more shares in Texas Roadhouse than they bought, over the last year. You can see the insider transactions (by individuals) 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Texas Roadhouse Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at Texas Roadhouse, over the last three months. James Zarley spent US$992k on stock. On the other hand, insiders netted US$537k by selling. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Texas Roadhouse insiders own about US$235m worth of shares (which is 5.9% of the company). 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 Texas Roadhouse Insiders?
The recent insider purchase is heartening. On the other hand the transaction history, over the last year, isn’t so positive. Overall, we’d prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, Texas Roadhouse insiders are reasonably well aligned, and optimistic for the future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Texas Roadhouse.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.