We wouldn't blame Vector Group Ltd. (NYSE:VGR) shareholders if they were a little worried about the fact that Bennett LeBow, the Independent Chairman of the Board recently netted about US$2.0m selling shares at an average price of US$11.69. Probably the most concerning element of the whole transaction is that the disposal amounted to 88% of their entire holding.
View our latest analysis for Vector Group
Vector Group Insider Transactions Over The Last Year
Notably, that recent sale by Independent Chairman of the Board Bennett LeBow was not the only time they sold Vector Group shares this year. They previously made an even bigger sale of -US$5.7m worth of shares at a price of US$11.53 per share. So we know that an insider sold shares at around the present share price of US$11.25. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
In the last twelve months insiders purchased 20.00k shares for US$206k. But they sold 960.53k shares for US$11m. All up, insiders sold more shares in Vector Group than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Vector Group insiders own about US$259m worth of shares (which is 15% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Vector Group Tell Us?
An insider sold Vector Group shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Vector Group makes money, and is growing profits. 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. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 4 warning signs we've spotted with Vector Group (including 2 which don't sit too well with us).
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
