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 we’ll take a look at whether insiders have been buying or selling shares in SiteOne Landscape Supply, Inc. (NYSE:SITE).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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’.
See our latest analysis for SiteOne Landscape Supply
SiteOne Landscape Supply Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Executive VP, John Guthrie, sold US$97k worth of shares at a price of US$161 per share. That means that even when the share price was below the current price of US$176, 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. This single sale was just 3.6% of John Guthrie’s stake. John Guthrie was the only individual insider to sell shares in the last twelve months.
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!
I will like SiteOne Landscape Supply better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at SiteOne Landscape Supply Have Sold Stock Recently
The last quarter saw substantial insider selling of SiteOne Landscape Supply shares. In total, Executive VP John Guthrie sold US$97k 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 SiteOne Landscape Supply Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. SiteOne Landscape Supply insiders own about US$74m worth of shares. That equates to 1.0% 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 SiteOne Landscape Supply Insider Transactions Indicate?
An insider hasn’t bought SiteOne Landscape Supply stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn’t show any insider buying. On the plus side, SiteOne Landscape Supply makes money, and is growing profits. While insiders do own shares, they don’t own a heap, and they have been selling. 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 SiteOne Landscape Supply. For example – SiteOne Landscape Supply has 2 warning signs we think you should be aware of.
But note: SiteOne Landscape Supply 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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