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Did Raven Industries, Inc. (NASDAQ:RAVN) Insiders Buy Up More Shares?

Brandie Wetzel

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 Raven Industries, Inc. (NASDAQ:RAVN).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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’.

View our latest analysis for Raven Industries

Raven Industries Insider Transactions Over The Last Year

Independent Director Richard Parod made the biggest insider purchase in the last 12 months. That single transaction was for US$115k worth of shares at a price of US$35.92 each. So it’s clear an insider wanted to buy, at around the current price. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. In any event it’s generally a positive if insiders are buying shares at around the current price.

Happily, we note that in the last year insiders bought 4.45k shares for a total of US$168k. Overall, Raven Industries insiders were net buyers last year. The average buy price was around US$37.68. I’d consider this a positive as it suggests insiders see value at around the current price, which is US$37.60. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NASDAQGS:RAVN Insider Trading January 28th 19
NASDAQGS:RAVN Insider Trading January 28th 19

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders at Raven Industries Have Bought Stock Recently

There was some insider buying at Raven Industries over the last quarter. Chairman of the Board Marc LeBaron purchased US$18k worth of shares in that period. It’s great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 1.1% of Raven Industries shares, worth about US$15m. 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 Raven Industries Tell Us?

Insider purchases have outweighed sales, in the last three months. But the difference isn’t much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Raven Industries and their transactions don’t cause us concern. Of course, the future is what matters most. So if you are interested in Raven Industries, you should check out this free report on analyst forecasts for the company.

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

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.