We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Universal Corporation (NYSE:UVV).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Colombia 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’.
The Last 12 Months Of Insider Transactions At Universal
David Moore made the biggest insider sale in the last 12 months. That single transaction was for US$1.7m worth of shares at a price of US$64.77 each. So we know that an insider sold shares at around the present share price of US$54.82. While their view may have changed since the sale, this is not a particularly positive fact. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
We note that in the last year insiders divested 42.77k shares for a total of US$2.8m. Over the last year we saw more insider selling of Universal shares, than buying. They sold for an average price of about US$65.30. It’s not ideal to see that insiders have sold at around the current price. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. The chart below shows insider transactions over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Universal Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Universal shares. In total, insiders dumped US$421k 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 directors think that the shares are a bargain.
Insider Ownership of Universal
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that Universal insiders own 1.2% of the company, worth about US$16m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Universal Insider Transactions Indicate?
Insiders haven’t bought Universal stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. But it is good to see that Universal is growing earnings. While insiders do own shares, they don’t own a heap, and they have been selling. We’re in no rush to buy! Along with insider transactions, I recommend checking if Universal is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.