Need To Know: U.S. Concrete, Inc. (NASDAQ:USCR) Insiders Have Been Selling Shares

By
Simply Wall St
Published
June 07, 2021
Source: Shutterstock

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 shareholders might well want to know whether insiders have been buying or selling shares in U.S. Concrete, Inc. (NASDAQ:USCR).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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 U.S. Concrete

U.S. Concrete Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, William Sandbrook, sold US$382k worth of shares at a price of US$38.15 per share. That means that even when the share price was below the current price of US$57.14, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 2.5% of William Sandbrook's holding.

U.S. Concrete insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and 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!

insider-trading-volume
NasdaqGS:USCR Insider Trading Volume June 7th 2021

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

U.S. Concrete Insiders Are Selling The Stock

The last three months saw significant insider selling at U.S. Concrete. Specifically, Regional VP & GM of Central Region Jeffrey Roberts ditched US$184k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership of U.S. Concrete

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. Insiders own 6.1% of U.S. Concrete shares, worth about US$59m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At U.S. Concrete Tell Us?

An insider hasn't bought U.S. Concrete stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But it is good to see that U.S. Concrete is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing U.S. Concrete. To help with this, we've discovered 4 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in U.S. Concrete.

But note: U.S. Concrete 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.

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