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Don't Ignore The Insider Selling In Reliance Steel & Aluminum

Simply Wall St ·  Dec 4, 2023 05:00

Some Reliance Steel & Aluminum Co. (NYSE:RS) shareholders may be a little concerned to see that the Director & Senior Advisor to the CEO, James Hoffman, recently sold a substantial US$2.7m worth of stock at a price of US$272 per share. However, that sale only accounted for 9.0% of their holding, so arguably it doesn't say much about their conviction.

See our latest analysis for Reliance Steel & Aluminum

Reliance Steel & Aluminum Insider Transactions Over The Last Year

Notably, that recent sale by Director & Senior Advisor to the CEO James Hoffman was not the only time they sold Reliance Steel & Aluminum shares this year. Earlier in the year, they fetched US$248 per share in a -US$9.8m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$279. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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. It is worth noting that this sale was only 20% of James Hoffman's holding.

Reliance Steel & Aluminum insiders didn't buy any shares over the last year. 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!

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NYSE:RS Insider Trading Volume December 4th 2023

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Reliance Steel & Aluminum Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Reliance Steel & Aluminum insiders own 0.7% of the company, currently worth about US$118m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Reliance Steel & Aluminum Insider Transactions Indicate?

An insider sold Reliance Steel & Aluminum shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. When we did our research, we found 2 warning signs for Reliance Steel & Aluminum (1 is significant!) that we believe deserve your full attention.

But note: Reliance Steel & Aluminum may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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