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 Worthington Industries, Inc. (NYSE:WOR).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. 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.’
Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.
The Last 12 Months Of Insider Transactions At Worthington Industries
Over the last year, we can see that the biggest insider sale was by Chairman of the Board & CEO John McConnell for US$4.6m worth of shares, at about US$46.00 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$35.78. So it may not tell us anything about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 28.00k shares worth US$1.0m. On the other hand they divested 125.82k shares, for US$5.8m. Over the last year we saw more insider selling of Worthington Industries shares, than buying. The average sell price was around US$46.25. It is certainly not great to see that insiders have sold shares in the company. However, we do note that the average sale price was significantly higher than the current share price (which is US$35.78). 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!
Worthington Industries 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 Worthington Industries Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Worthington Industries. John Blystone spent US$917k on stock, and there wasn’t any selling. That shows some optimism about the company’s future.
Does Worthington Industries Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Worthington Industries insiders own about US$235m worth of shares (which is 12% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Worthington Industries Insider Transactions Indicate?
The recent insider purchase is heartening. On the other hand the transaction history, over the last year, isn’t so positive. The high levels of insider ownership, and the recent buying by an insider, suggests they are well aligned and optimistic. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Worthington Industries.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.