We wouldn't blame Tempur Sealy International, Inc. (NYSE:TPX) shareholders if they were a little worried about the fact that Arik Ruchim, the Independent Director recently netted about US$8.9m selling shares at an average price of US$89.47. However, that sale only accounted for 1.7% of their holding, so arguably it doesn't say much about their conviction.
The Last 12 Months Of Insider Transactions At Tempur Sealy International
Notably, that recent sale by Independent Director Arik Ruchim was not the only time they sold Tempur Sealy International shares this year. They previously made an even bigger sale of -US$188.1m worth of shares at a price of US$85.50 per share. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$85.76. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 28% of Arik Ruchim's stake.
We note that in the last year insiders divested 2337231 shares for a total of US$199m. Insiders in Tempur Sealy International didn't buy any shares in the last year. 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!
I will like Tempur Sealy International better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
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. We usually like to see fairly high levels of insider ownership. Tempur Sealy International insiders own about US$63m worth of shares. That equates to 1.3% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Tempur Sealy International Insider Transactions Indicate?
An insider sold Tempur Sealy International shares recently, but they didn't buy any. And even if we look to the last year, we didn't see any purchases. But since Tempur Sealy International is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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