We wouldn't blame Eagle Materials Inc. (NYSE:EXP) shareholders if they were a little worried about the fact that David Powers, the Independent Director recently netted about US$2.2m selling shares at an average price of US$241. That's a big disposal, and it decreased their holding size by 33%, which is notable but not too bad.
Eagle Materials Insider Transactions Over The Last Year
The insider, Robert Stewart, made the biggest insider sale in the last 12 months. That single transaction was for US$2.2m worth of shares at a price of US$169 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$243. 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. This single sale was just 49% of Robert Stewart's stake.
Eagle Materials insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Eagle Materials insiders own about US$115m worth of shares (which is 1.4% of the company). 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 Eagle Materials Insider Transactions Indicate?
Insiders haven't bought Eagle Materials stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But it is good to see that Eagle Materials is growing earnings. 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. Every company has risks, and we've spotted 2 warning signs for Eagle Materials you should know about.
But note: Eagle Materials 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.