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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 shareholders might well want to know whether insiders have been buying or selling shares in Boyd Gaming Corporation (NYSE:BYD).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
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’.
Boyd Gaming Insider Transactions Over The Last Year
Executive VP Brian Larson made the biggest insider sale in the last 12 months. That single transaction was for US$2.6m worth of shares at a price of US$35.93 each. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$27.85. So it may not tell us anything about how insiders feel about the current share price.
We note that in the last year insiders divested 328.91k shares for a total of US$10m. All up, insiders sold more shares in Boyd Gaming than they bought, over the last year. The average sell price was around US$31.80. It’s not ideal to see that insiders have sold at around the current price of US$27.85. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Boyd Gaming Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Boyd Gaming shares. Specifically, VP & Director William Boyd ditched US$2.4m worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Boyd Gaming insiders own 23% of the company, currently worth about US$708m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Boyd Gaming Insiders?
An insider sold stock recently, but they haven’t been buying. Looking to the last twelve months, our data doesn’t show any insider buying. But since Boyd Gaming is profitable and growing, we’re not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in Boyd Gaming, you should check out this free report on analyst forecasts for the company.
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.
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. On rare occasion, data errors may occur. Thank you for reading.