We wouldn't blame UniFirst Corporation (NYSE:UNF) shareholders if they were a little worried about the fact that Cecelia Levenstein, a company insider, recently netted about US$1.5m selling shares at an average price of US$153. That's a big disposal, and it decreased their holding size by 17%, which is notable but not too bad.

The Last 12 Months Of Insider Transactions At UniFirst

Notably, that recent sale by insider Cecelia Levenstein was not the only time they sold UniFirst shares this year. They previously made an even bigger sale of -US$4.0m worth of shares at a price of US$159 per share. That means that even when the share price was below the current price of US$176, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 25% of Cecelia Levenstein's holding.

In the last year UniFirst insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) 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!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. UniFirst insiders own 10% of the company, currently worth about US$291m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The UniFirst Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, UniFirst makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing UniFirst. Every company has risks, and we've spotted 1 warning sign for UniFirst you should know about.

Of course UniFirst may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com