Insiders sold US$5.0m worth of Waste Connections, Inc. (NYSE:WCN) stock last year, could be a warning sign to watch out for
While Waste Connections, Inc. (NYSE:WCN) shareholders have enjoyed a good week with stock up 4.4%, they need remain vigilant. Although prices were relatively low, insiders chose to sell US$5.0m worth of stock in the past 12 months. This could be a sign of impending weakness.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Waste Connections
The Last 12 Months Of Insider Transactions At Waste Connections
The Senior VP & Chief Accounting Office, Matthew Black, made the biggest insider sale in the last 12 months. That single transaction was for US$1.2m worth of shares at a price of US$138 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$144. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 24% of Matthew Black's holding.
All up, insiders sold more shares in Waste Connections than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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.
Waste Connections Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Waste Connections. In total, insiders dumped US$1.4m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership Of Waste Connections
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Waste Connections insiders own 0.3% of the company, worth about US$113m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Waste Connections Insiders?
Insiders haven't bought Waste Connections stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, Waste Connections makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Waste Connections.
But note: Waste Connections 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, but not derivative transactions.
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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.
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