Don't Ignore The Fact That This Insider Just Sold Some Shares In Vector Group Ltd. (NYSE:VGR)

By
Simply Wall St
Published
September 10, 2020
NYSE:VGR

We'd be surprised if Vector Group Ltd. (NYSE:VGR) shareholders haven't noticed that the Independent Chairman of the Board, Bennett LeBow, recently sold US$457k worth of stock at US$10.22 per share. However, the silver lining is that the sale only reduced their total holding by 0.8%, so we're hesitant to read anything much into it, on its own.

View our latest analysis for Vector Group

Vector Group Insider Transactions Over The Last Year

The insider, Phillip Frost, made the biggest insider sale in the last 12 months. That single transaction was for US$26m worth of shares at a price of US$12.50 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$10.40. So it may not shed much light on insider confidence at current levels.

Happily, we note that in the last year insiders paid US$407k for 37.50k shares. But insiders sold 2.44m shares worth US$30m. Over the last year we saw more insider selling of Vector Group shares, than buying. 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!

insider-trading-volume
NYSE:VGR Insider Trading Volume September 10th 2020

I will like Vector Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of Vector Group

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Vector Group insiders own about US$266m worth of shares (which is 17% of the company). 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 Vector Group Tell Us?

An insider sold Vector Group shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Vector Group. Every company has risks, and we've spotted 5 warning signs for Vector Group (of which 1 can't be ignored!) you should know about.

Of course Vector Group 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, but not derivative transactions.

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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. 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.
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