How Much Are Barrett Business Services, Inc. (NASDAQ:BBSI) Insiders Taking Off The Table?
We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Barrett Business Services, Inc. (NASDAQ:BBSI).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Check out our latest analysis for Barrett Business Services
The Last 12 Months Of Insider Transactions At Barrett Business Services
In the last twelve months, the biggest single sale by an insider was when Chief Operating Officer – Corporate Operations Gregory Vaughn sold US$1.3m worth of shares at a price of US$80.98 per share. So we know that an insider sold shares at around the present share price of US$79.99. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
Over the last year, we note insiders sold 36.79k shares worth US$2.9m. All up, insiders sold more shares in Barrett Business Services than they bought, over the last year. They sold for an average price of about US$77.53. We don’t gain much confidence from insider selling near the recent share price. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Barrett Business Services Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Barrett Business Services shares. Specifically, insiders ditched US$2.1m 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 Barrett Business Services
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. It appears that Barrett Business Services insiders own 4.2% of the company, worth about US$25m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Barrett Business Services Insider Transactions Indicate?
Insiders sold Barrett Business Services shares recently, but they didn’t buy any. Looking to the last twelve months, our data doesn’t show any insider buying. But since Barrett Business Services is profitable and growing, we’re not too worried by this. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’re in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Barrett Business Services.
Of course Barrett Business Services may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 editorial-team@simplywallst.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.
