Masonite International Corporation (NYSE:DOOR) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Masonite International
The Last 12 Months Of Insider Transactions At Masonite International
In the last twelve months, the biggest single sale by an insider was when the Independent Chairman of the Board, Robert Byrne, sold US$226k worth of shares at a price of US$90.58 per share. That means that an insider was selling shares at slightly below the current price (US$93.35). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 6.2% of Robert Byrne's holding.
Over the last year we saw more insider selling of Masonite International shares, than buying. 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!
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Masonite International Insiders Are Selling The Stock
The last three months saw some Masonite International insider selling. The selling netted US$80k for insider Alexander Legall. But US$49k was spent on buying, too, (as we mentioned above) . While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.
Insider Ownership Of Masonite International
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Masonite International insiders own about US$23m worth of shares. That equates to 1.1% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Masonite International Tell Us?
Insider selling has just outweighed insider buying in the last three months. But the difference isn't enough to have us worried. We're a little cautious about the insider selling at Masonite International. The modest level of insider ownership is, at least, some comfort. 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. Every company has risks, and we've spotted 1 warning sign for Masonite International you should know about.
Of course Masonite International 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.