Are Insiders Buying Sally Beauty Holdings, Inc. (NYSE:SBH) Stock?
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 shareholders might well want to know whether insiders have been buying or selling shares in Sally Beauty Holdings, Inc. (NYSE:SBH).
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 in the company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
See our latest analysis for Sally Beauty Holdings
The Last 12 Months Of Insider Transactions At Sally Beauty Holdings
The President Christian Brickman made the biggest insider purchase in the last 12 months. That single transaction was for US$145k worth of shares at a price of US$14.53 each. We do like to see buying, but this purchase was made at well below the current price of US$19.65. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months insiders purchased 69.85k shares for US$818k. But they sold 4.58k shares for US$48k. In total, Sally Beauty Holdings insiders bought more than they sold over the last year. They paid about US$11.72 on average. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Insiders at Sally Beauty Holdings Have Bought Stock Recently
It's good to see that Sally Beauty Holdings insiders have made notable investments in the company's shares. President Christian Brickman spent US$145k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.
Insider Ownership of Sally Beauty Holdings
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Sally Beauty Holdings insiders own about US$22m 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.
What Might The Insider Transactions At Sally Beauty Holdings Tell Us?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Sally Beauty Holdings shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sally Beauty Holdings. Every company has risks, and we've spotted 3 warning signs for Sally Beauty Holdings (of which 1 makes us a bit uncomfortable!) you should know about.
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.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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