Insiders At Eagle Materials Sold US$2.5m In Stock, Alluding To Potential Weakness

Many Eagle Materials Inc. (NYSE:EXP) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Eagle Materials

Eagle Materials Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, Richard Stewart, for US$1.1m worth of shares, at about US$300 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$213. So it may not shed much light on insider confidence at current levels.

In total, Eagle Materials insiders sold more than they bought over the last year. 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 Eagle Materials Have Bought Stock Recently

It's good to see that Eagle Materials insiders have made notable investments in the company's shares. Independent Chairman of the Board Michael Nicolais spent US$80k on stock, and there wasn't any selling. That shows some optimism about the company's future.

Does Eagle Materials Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Eagle Materials insiders own 1.2% of the company, worth about US$82m. 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 Eagle Materials Tell Us?

It is good to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. We don't take much heart from transactions by Eagle Materials insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Eagle Materials. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Eagle Materials.

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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.