We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell U.S. Silica Holdings, Inc. (NYSE:SLCA), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise’.
View our latest analysis for U.S. Silica Holdings
U.S. Silica Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by CEO & Director Bryan Shinn for US$103k worth of shares, at about US$1.03 per share. We do like to see buying, but this purchase was made at well below the current price of US$2.72. Because the shares were purchased at a lower price, this particular buy doesn’t tell us much about how insiders feel about the current share price.
U.S. Silica Holdings insiders may have bought shares in the last year, but they didn’t sell any. The average buy price was around US$1.91. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today’s levels. 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!
U.S. Silica Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of U.S. Silica Holdings
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From looking at our data, insiders own US$3.0m worth of U.S. Silica Holdings stock, about 1.5% of the company. I generally like to see higher levels of ownership.
What Might The Insider Transactions At U.S. Silica Holdings Tell Us?
It doesn’t really mean much that no insider has traded U.S. Silica Holdings shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. We’d like to see bigger individual holdings. However, we don’t see anything to make us think U.S. Silica Holdings insiders are doubting the company. 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. Case in point: We’ve spotted 2 warning signs for U.S. Silica Holdings you should be aware of.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.
This article by Simply Wall St is general in nature. 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.
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