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 we’ll take a look at whether insiders have been buying or selling shares in BlueLinx Holdings Inc. (NYSE:BXC).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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.’
BlueLinx Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Chairman Kim Fennebresque bought US$1.1m worth of shares at a price of US$33.96 per share. That means that an insider was happy to buy shares at above the current price. Their view may have changed since then, but at least it shows they felt optimistic at the time. That purchase may suggest an expectation of positive returns over the long term.
Over the last year, we can see that insiders have bought 49.80k shares worth US$1.5m. In the last twelve months there was more buying than selling by BlueLinx Holdings insiders. Their average price was about US$30.60. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of US$30.90. The chart below shows insider transactions (by 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. BlueLinx Holdings insiders own about US$11m worth of shares. That equates to 3.8% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About BlueLinx Holdings Insiders?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in BlueLinx Holdings and we see no evidence to suggest they are worried about the future. Along with insider transactions, I recommend checking if BlueLinx Holdings is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course BlueLinx Holdings may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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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.