Those following along with GMS Inc. (NYSE:GMS) will no doubt be intrigued by the recent purchase of shares by Ronald Ross, Independent Director of the company, who spent a stonking US$1.2m on stock at an average price of US$11.17. Not only is that a big swing, but it increased their holding size by 43%, which is definitely great to see.
GMS Insider Transactions Over The Last Year
In fact, the recent purchase by Ronald Ross was the biggest purchase of GMS shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of US$15.15 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the GMS insiders decided to buy shares at close to current prices.
In the last twelve months insiders purchased 111.89k shares for US$1.3m. But insiders sold 33051 shares worth US$769k. Overall, GMS insiders were net buyers last year. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
GMS is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. GMS insiders own about US$16m worth of shares. That equates to 2.5% of the company. 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 Does This Data Suggest About GMS Insiders?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in GMS shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing GMS. Our analysis shows 2 warning signs for GMS (1 doesn't sit too well with us!) and we strongly recommend you look at them before investing.
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.
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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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