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 Boise Cascade Company (NYSE:BCC).
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, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
The Last 12 Months Of Insider Transactions At Boise Cascade
In the last twelve months, the biggest single sale by an insider was when the Executive Vice President of Wood Products Division, Dean Brown, sold US$118k worth of shares at a price of US$29.91 per share. That means that an insider was selling shares at slightly below the current price (US$30.76). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 11.9% of Dean Brown's stake. Dean Brown was the only individual insider to sell over 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!
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Boise Cascade Insiders Are Selling The Stock
The last three months saw some Boise Cascade insider selling. US$118k worth of shares were sold by Dean Brown. But the good news is that there was purchasing too (as previously mentioned), worth US$81k. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.
Insider Ownership of Boise Cascade
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 1.3% of Boise Cascade shares, worth about US$16m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Boise Cascade Tell Us?
We note that there's been a little more insider selling than buying, recently. But the net divestment is not enough to concern us at all. Recent sales exacerbate our caution arising from analysis of Boise Cascade insider transactions. The modest level of insider ownership is, at least, some comfort. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Boise Cascade.
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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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.