U.S. Markets open in 1 hr 52 mins

Should You Take Comfort From Insider Transactions At WestRock Company (NYSE:WRK)?

Simply Wall St

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in WestRock Company (NYSE:WRK).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’

Check out our latest analysis for WestRock

The Last 12 Months Of Insider Transactions At WestRock

Director Russell Currey made the biggest insider purchase in the last 12 months. That single transaction was for US$188k worth of shares at a price of US$37.50 each. That means that an insider was happy to buy shares at around the current price. Of course they may have changed their mind. But this suggests they are optimistic. We generally consider it a positive if insiders have been buying on market, even if the share price has increased a bit since then.

In the last twelve months insiders paid US$288k for 7.65k shares purchased. In the last twelve months there was more buying than selling by WestRock insiders. They paid about US$37.65 on average. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (US$37.70). The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

NYSE:WRK Recent Insider Trading, March 11th 2019

WestRock is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders at WestRock Have Bought Stock Recently

Over the last three months, we’ve seen significant insider buying at WestRock. Overall, 2 insiders shelled out US$288k for shares in the company — and none sold. This could be interpreted as suggesting a positive outlook.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that WestRock insiders own 1.5% of the company, worth about US$142m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The WestRock Insider Transactions Indicate?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about WestRock. One for the watchlist, at least! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course WestRock may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.