Some Vulcan Materials Company (NYSE:VMC) shareholders may be a little concerned to see that the Senior Vice President of Central, David Clement, recently sold a substantial US$685k worth of stock at a price of US$184 per share. That sale reduced their total holding by 24% which is hardly insignificant, but far from the worst we've seen.
The Last 12 Months Of Insider Transactions At Vulcan Materials
Notably, that recent sale by David Clement is the biggest insider sale of Vulcan Materials shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$188, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 24%of David Clement's holding.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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. Insiders own 0.2% of Vulcan Materials shares, worth about US$56m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Vulcan Materials Tell Us?
An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Vulcan Materials is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for Vulcan Materials you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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