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 United Rentals, Inc. (NYSE:URI).
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, most countries require that the company discloses such transactions to the market.
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 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'.
United Rentals Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the CEO & Director, Michael Kneeland, for US$4.0m worth of shares, at about US$133 per share. So what is clear is that an insider saw fit to sell at around the current price of US$127. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
In the last twelve months insiders purchased 1599 shares for US$183k. But insiders sold 57438 shares worth US$7.6m. Over the last year we saw more insider selling of United Rentals shares, than buying. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like United Rentals better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
United Rentals Insiders Are Selling The Stock
We've seen more insider selling than insider buying at United Rentals recently. In total, insiders sold US$6.8m worth of shares in that time. On the other hand we note Independent Director Shiv Singh bought US$49k worth of shares. Generally this level of net selling might be considered a bit bearish.
Does United Rentals Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Insiders own 0.4% of United Rentals shares, worth about US$43m. 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 United Rentals Tell Us?
The stark truth for United Rentals is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! Of course, the future is what matters most. So if you are interested in United Rentals, you should check out this free report on analyst forecasts for the company.
But note: United Rentals 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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.