Beacon Roofing Supply, Inc. (NASDAQ:BECN) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 3.0% resulting in a US$104m addition to the company’s market value. In other words, the original US$344k purchase is now worth US$365k.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Beacon Roofing Supply
The President Julian Francis made the biggest insider purchase in the last 12 months. That single transaction was for US$245k worth of shares at a price of US$48.90 each. That means that an insider was happy to buy shares at around the current price of US$51.75. 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. The good news for Beacon Roofing Supply share holders is that insiders were buying at near the current price.
In the last twelve months insiders purchased 7.05k shares for US$344k. But insiders sold 2.30k shares worth US$143k. Overall, Beacon Roofing Supply insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Beacon Roofing Supply is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
The last quarter saw substantial insider selling of Beacon Roofing Supply shares. In total, insider James Gosa sold US$143k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
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. Insiders own 0.7% of Beacon Roofing Supply shares, worth about US$25m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
An insider hasn't bought Beacon Roofing Supply stock in the last three months, but there was some selling. On the other hand, the insider transactions over the last year are encouraging. It's good to see insiders are shareholders. So the recent selling doesn't worry us too much. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Beacon Roofing Supply has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.
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.
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