We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Systemax Inc. (NYSE:SYX), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
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, 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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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Systemax Insider Transactions Over The Last Year
Thomas Axmacher made the biggest insider sale in the last 12 months. That single transaction was for US$196k worth of shares at a price of US$39.07 each. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$23.98. So it is hard to draw any strong conclusion from it.
In the last twelve months insiders netted US$253k for 6.43k shares sold. Over the last year we saw more insider selling of Systemax shares, than buying. The sellers received a price of around US$39.29, on average. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (US$23.98), so it probably doesn’t tell us a lot about the value on offer today. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Systemax
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that Systemax insiders own 61% of the company, worth about US$527m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Systemax Insider Transactions Indicate?
The fact that there have been no Systemax insider transactions recently certainly doesn’t bother us. It’s heartening that insiders own plenty of stock, but we’d like to see more insider buying, since the last year of Systemax insider transactions don’t fill us with confidence. Of course, the future is what matters most. So if you are interested in Systemax, you should check out this free report on analyst forecasts for the company.
But note: Systemax 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.
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 firstname.lastname@example.org.