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We often see insiders buying up shares in companies that perform well over the long term. 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 U.S. Concrete, Inc. (NASDAQ:USCR).
What Is Insider Selling?
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 equally, we would consider it foolish to ignore insider transactions altogether. 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'.
U.S. Concrete Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Director William Sandbrook bought US$419k worth of shares at a price of US$27.96 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$37.70. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 40.10k shares worth US$975k. But insiders sold 10.00k shares worth US$382k. Overall, U.S. Concrete insiders were net buyers during the last year. Their average price was about US$24.31. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
U.S. Concrete is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
U.S. Concrete Insiders Are Selling The Stock
The last quarter saw substantial insider selling of U.S. Concrete shares. Specifically, Director William Sandbrook ditched US$382k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
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. Insiders own 5.3% of U.S. Concrete shares, worth about US$33m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At U.S. Concrete Tell Us?
An insider sold stock recently, but they haven't been buying. But we take heart from prior transactions. And insiders do own shares. So we're happy enough to look past some selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing U.S. Concrete. Be aware that U.S. Concrete is showing 3 warning signs in our investment analysis, and 1 of those is concerning...
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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