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Should You Be Worried About Insider Transactions At Brady Corporation (NYSE:BRC)?

Ricardo Crouch

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Brady Corporation (NYSE:BRC).

Do Insider Transactions Matter?

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.

We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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.’

See our latest analysis for Brady

Brady Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when Director Elizabeth Bruno sold US$1.1m worth of shares at a price of US$43.86 per share. So we know that an insider sold shares at around the present share price of US$41.01. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.

In the last twelve months insiders netted US$2.2m for 54.70k shares sold. Over the last year we saw more insider selling of Brady shares, than buying. The sellers received a price of around US$40.53, on average. We don’t gain much confidence from insider selling near the recent share price. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see a visual depiction of insider transactions over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NYSE:BRC Insider Trading December 24th 18

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Insiders at Brady Have Sold Stock Recently

The last three months saw significant insider selling at Brady. In total, insiders sold US$1.2m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership of Brady

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that Brady insiders own 9.6% of the company, worth about US$207m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Brady Tell Us?

Insiders haven’t bought Brady stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn’t show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Brady.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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 editorial-team@simplywallst.com.