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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell U.S. Xpress Enterprises, Inc. (NYSE:USX), 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 in the company. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
The Last 12 Months Of Insider Transactions At U.S. Xpress Enterprises
Over the last year, we can see that the biggest insider purchase was by Co-Founder & Executive Chairman Max Fuller for US$339k worth of shares, at about US$4.20 per share. Even though the purchase was made at a significantly lower price than the recent price (US$9.33), we still think insider buying is a positive. 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.
Happily, we note that in the last year insiders paid US$826k for 186.51k shares. But they sold 2.11k shares for US$20k. In total, U.S. Xpress Enterprises insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
U.S. Xpress Enterprises is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at U.S. Xpress Enterprises Have Sold Stock Recently
Over the last three months, we've seen a bit of insider selling at U.S. Xpress Enterprises. insider Joel Gard divested only US$20k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. U.S. Xpress Enterprises insiders own about US$250m worth of shares (which is 54% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At U.S. Xpress Enterprises Tell Us?
While there has not been any insider buying in the last three months, there has been selling. However, the sales are not big enough to concern us at all. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like U.S. Xpress Enterprises insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To help with this, we've discovered 2 warning signs (1 is significant!) that you ought to be aware of before buying any shares in U.S. Xpress Enterprises.
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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