We often see insiders buying up shares in companies that perform well over the long term. 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 Ryerson Holding Corporation (NYSE:RYI).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
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'.
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Ryerson Holding Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Stephen Larson bought US$171k worth of shares at a price of US$8.55 per share. That implies that an insider found the current price of US$10.52 per share to be enticing. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Ryerson Holding share holders is that insiders were buying at near the current price.
Happily, we note that in the last year insiders bought 41546 shares for a total of US$363k. In the last twelve months Ryerson Holding insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Ryerson Holding Insiders Bought Stock Recently
It's good to see that Ryerson Holding insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought US$195k worth of shares. This is a positive in our book as it implies some confidence.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Ryerson Holding insiders own 2.0% of the company, worth about US$7.9m. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Ryerson Holding Tell Us?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Ryerson Holding insiders are reasonably well aligned, and optimistic for the future. Of course, the future is what matters most. So if you are interested in Ryerson Holding, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.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.