We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we’ll take a look at whether insiders have been buying or selling shares in SYNNEX Corporation (NYSE:SNX).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 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.’
SYNNEX Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Chairman of the Board Kevin Murai sold US$474k worth of shares at a price of US$78.52 per share. That means that an insider was selling shares at below the current price (US$79.75). While sellers have a variety of reasons for selling, this isn’t particularly great to see. As a general rule we consider it to be discouraging when insiders are selling below the current price. We note that the biggest single sale was only 4% of Kevin Murai’s holding.
All up, insiders sold more shares in SYNNEX than they bought, over the last year. The sellers received a price of around US$97.23, on average. It’s not too encouraging to see that insiders have sold at below the current price. But we wouldn’t put too much weight on the insider selling. You can see a visual depiction of insider transactions over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
SYNNEX is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at SYNNEX Have Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at SYNNEX. In total, Feng-Chiang Miau bought US$806k worth of shares in that time. But we did see insider selling worth US$706k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. SYNNEX insiders own about US$76m worth of shares (which is 1.9% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About SYNNEX Insiders?
It’s certainly positive to see the recent insider purchase. On the other hand the transaction history, over the last year, isn’t so positive. We don’t take much heart from transactions by SYNNEX insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for SYNNEX.
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.