It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Vectrus, Inc. (NYSE:VEC).
What Is Insider Selling?
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, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. 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.’
Vectrus Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Director Phillip Widman for US$312k worth of shares, at about US$31.21 per share. That means that an insider was happy to buy shares at above the current price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. That purchase may suggest an expectation of positive returns over the long term.
Happily, we note that in the last year insiders paid US$905k for 31.98k shares. On the other hand they divested 1.38k shares, for US$50k. Overall, Vectrus insiders were net buyers last year. Their average price was about US$28.31. These transactions suggest that insiders have considered the current price of US$24.47 attractive. You can see the insider transactions (by 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!
Vectrus is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Vectrus Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Vectrus. Not only was there no selling that we can see, but they collectively bought US$271k worth of shares. This could be interpreted as suggesting a positive outlook.
For a common shareholder, it is worth checking how many shares are held by company 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. From our data, it seems that Vectrus insiders own 2.2% of the company, worth about US$6.0m. We do generally prefer see higher levels of insider ownership.
What Might The Insider Transactions At Vectrus Tell Us?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Vectrus insiders are expecting a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Vectrus.
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 email@example.com.