Masonite International Corporation (NYSE:DOOR) stock jumped 4.7% last week, but insiders who sold US$999,000 worth of stock in the past year are likely to be in a better position. Holding shares would have meant that their investment would be worth less today than it was when sold. So, selling at an average price of US$116, which is higher than the current price, might have been the best decision.
While insider trading isn’t the most important thing when it comes to long-term investing, logic dictates that you should pay attention to whether insiders are buying or selling stocks.
Masonite International insider trading over the past year
In the past twelve months, the largest single insider sale occurred when insider Robert Lewis sold US$999,000 worth of stock at US$116 per share. While we generally don’t like to see insider selling, it’s more of a concern if the selling takes place at a lower price. The good news is that this big sell was well above the current price of US$93.62. So this may not tell us anything about what insiders think of the current stock price. The only individual insider salesperson in the past year was Robert Lewis.
You can see a visual representation of insider trading (by companies and individuals) over the past 12 months, below. By clicking on the graph below, you will be able to see the precise detail of each insider trade!
If you like buying stocks that insiders are buying, rather than selling, then you might love this free list of companies. (Hint: insiders bought them).
Masonite International Insider Ownership
Examining the total insider holdings in a company can help you know if they are well aligned with common shareholders. High insider participation often makes company management more concerned with the interests of shareholders. Insiders own 0.8% of the shares of Masonite International, worth approximately $17 million. We have certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest an alignment between insiders and other shareholders.
So what does this data suggest about Masonite International insiders?
There have been no insider trades in the last three months – that’s not saying much. Still, insider trading at Masonite International over the past 12 months is not very encouraging. The modest level of insider ownership is, at least, some comfort. In addition to knowing what insider trading is going on, it pays to identify the risks that Masonite International faces. To do this, you need to find out about the 2 warning signs we spotted with Masonite International (including 1 which is of concern).
Sure Masonite International may not be the best stock to buy. So you might want to see this free set of high quality companies.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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