Positive Signs As Multiple Insiders Buy Valvoline Stock

Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Valvoline Inc. (NYSE:VVV), that sends out a positive message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Valvoline

The Last 12 Months Of Insider Transactions At Valvoline

The Independent Director Charles Sonsteby made the biggest insider purchase in the last 12 months. That single transaction was for US$395k worth of shares at a price of US$39.50 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$38.89). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months insiders purchased 12.50k shares for US$494k. But they sold 2.50k shares for US$103k. In total, Valvoline insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Valvoline is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Valvoline Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Valvoline. Not only was there no selling that we can see, but they collectively bought US$494k worth of shares. This could be interpreted as suggesting a positive outlook.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Valvoline insiders own about US$32m worth of shares. That equates to 0.6% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Valvoline Insider Transactions Indicate?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Valvoline we think they are probably pretty confident of a bright future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 1 warning sign with Valvoline and understanding it should be part of your investment process.

Of course Valvoline 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 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.