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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we'll take a look at whether insiders have been buying or selling shares in Vistra Corp. (NYSE:VST).
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.
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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
The Last 12 Months Of Insider Transactions At Vistra
The CEO & Director Curtis Morgan made the biggest insider purchase in the last 12 months. That single transaction was for US$749k worth of shares at a price of US$18.19 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$23.38. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Over the last year, we can see that insiders have bought 258.10k shares worth US$4.4m. On the other hand they divested 18.66k shares, for US$387k. In the last twelve months there was more buying than selling by Vistra insiders. You can see the insider transactions (by companies and 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!
Vistra is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Vistra Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Vistra. Not only was there no selling that we can see, but they collectively bought US$719k worth of shares. This could be interpreted as suggesting a positive outlook.
Does Vistra Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Vistra insiders own about US$35m worth of shares. That equates to 0.3% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Vistra Insider Transactions Indicate?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Vistra shares, given these transactions (along with notable insider ownership of the company). So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 4 warning signs for Vistra (1 doesn't sit too well with us!) and we strongly recommend you look at these before investing.
Of course Vistra may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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