Anyone interested in Patrick Industries, Inc. (NASDAQ:PATK) should probably be aware that the Independent Director, Michael Kitson, recently divested US$365k worth of shares in the company, at an average price of US$111 each. The eyebrow raising move amounted to a reduction of 28% in their holding.
The Last 12 Months Of Insider Transactions At Patrick Industries
The Chairman of the Board, Todd Cleveland, made the biggest insider sale in the last 12 months. That single transaction was for US$3.3m worth of shares at a price of US$84.04 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$111. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower 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 15% of Todd Cleveland's holding.
Patrick Industries insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Patrick Industries 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Patrick Industries insiders own 5.4% of the company, worth about US$134m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Patrick Industries Insiders?
Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Patrick Industries. Case in point: We've spotted 4 warning signs for Patrick Industries you should be aware of.
Of course Patrick Industries 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.