IES Holdings, Inc. (NASDAQ:IESC) shareholders may have reason to be concerned, as several insiders sold their shares over the past year. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for IES Holdings
IES Holdings Insider Transactions Over The Last Year
The insider, Alison Petersen, made the biggest insider sale in the last 12 months. That single transaction was for US$484k worth of shares at a price of US$53.29 each. That means that even when the share price was below the current price of US$74.70, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was 73% of Alison Petersen's holding.
Happily, we note that in the last year insiders paid US$161k for 5.50k shares. On the other hand they divested 13.22k shares, for US$731k. Over the last year we saw more insider selling of IES Holdings shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
IES Holdings Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at IES Holdings. In total, VP, General Counsel & Corporate Secretary Mary Newman dumped US$139k 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.
Does IES Holdings Boast High Insider Ownership?
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. IES Holdings insiders own about US$34m worth of shares. That equates to 2.3% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At IES Holdings Tell Us?
An insider sold IES Holdings shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since IES Holdings is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
