How Much Are Biglari Holdings Inc. (NYSE:BH.A) Insiders Spending On Buying Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Biglari Holdings Inc. (NYSE:BH.A), 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, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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'.

View our latest analysis for Biglari Holdings

The Last 12 Months Of Insider Transactions At Biglari Holdings

Over the last year, we can see that the biggest insider purchase was by Chairman & CEO Sardar Biglari for US$1.8m worth of shares, at about US$625 per share. That means that an insider was happy to buy shares at above the current price of US$315. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Sardar Biglari was the only individual insider to buy shares in the last twelve months.

Sardar Biglari bought a total of 13.34k shares over the year at an average price of US$582. You can see the insider transactions (by 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Our information indicates that Biglari Holdings insiders own about US$779k worth of shares. We might be missing something but that seems like very low insider ownership.

So What Does This Data Suggest About Biglari Holdings Insiders?

It doesn't really mean much that no insider has traded Biglari Holdings shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Biglari Holdings stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Biglari Holdings. For example, Biglari Holdings has 2 warning signs (and 1 which is potentially serious) we think you should know about.

But note: Biglari Holdings 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, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

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. Thank you for reading.