Tractor Supply Insiders Sell US$7.5m Of Stock, Possibly Signalling Caution

The fact that multiple Tractor Supply Company (NASDAQ:TSCO) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. 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.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Tractor Supply

Tractor Supply Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the President, Harry Lawton, sold US$4.8m worth of shares at a price of US$233 per share. That means that an insider was selling shares at slightly below the current price (US$282). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 21% of Harry Lawton's stake.

In the last year Tractor Supply insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Tractor Supply Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Tractor Supply shares. Specifically, Executive VP & Chief Supply Chain Officer Colin Yankee ditched US$981k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does Tractor Supply Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.2% of Tractor Supply shares, worth about US$75m. 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 Tractor Supply Tell Us?

An insider sold Tractor Supply shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since Tractor Supply is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Tractor Supply. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Tractor Supply.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 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.