Need To Know: Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) Insiders Have Been Buying Shares
It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP), you may well want to know whether insiders have been buying or selling.
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 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'.
Check out our latest analysis for Universal Stainless & Alloy Products
The Last 12 Months Of Insider Transactions At Universal Stainless & Alloy Products
In the last twelve months, the biggest single purchase by an insider was when Executive VP & Chief Commercial Officer Christopher Zimmer bought US$258k worth of shares at a price of US$5.64 per share. We do like to see buying, but this purchase was made at well below the current price of US$11.45. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
The chart below shows insider transactions (by companies and individuals) 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Universal Stainless & Alloy Products Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Universal Stainless & Alloy Products shares. In total, insider Wendel Crosby dumped US$50k 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.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Universal Stainless & Alloy Products insiders own 5.9% of the company, worth about US$6.0m. We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At Universal Stainless & Alloy Products Tell Us?
An insider hasn't bought Universal Stainless & Alloy Products stock in the last three months, but there was some selling. On the other hand, the insider transactions over the last year are encouraging. But we'd like it if insiders owned more stock, overall. So we can't be sure that insiders are optimistic. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Universal Stainless & Alloy Products has 1 warning sign we think you should be aware of.
But note: Universal Stainless & Alloy Products may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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