We note that the Patrick Industries, Inc. (NASDAQ:PATK) Lead Independent Director, M. Welch, recently sold US$68k worth of stock for US$81.23 per share. On the bright side, that’s just a small sale and only reduced their holding by 0.7%.
The Last 12 Months Of Insider Transactions At Patrick Industries
Over the last year, we can see that the biggest insider sale was by the Independent Director, Michael Kitson, for US$671k worth of shares, at about US$67.12 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$81.95. 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. We note that the biggest single sale was only 48% of Michael Kitson’s holding.
Happily, we note that in the last year insiders paid US$655k for 13.61k shares. But they sold 20.43k shares for US$1.3m. All up, insiders sold more shares in Patrick Industries 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!
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Insider Ownership of Patrick Industries
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Patrick Industries insiders own about US$102m worth of shares (which is 5.3% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Patrick Industries Tell Us?
Insiders sold Patrick Industries shares recently, but they didn’t buy any. And our longer term analysis of insider transactions didn’t bring confidence, either. But it is good to see that Patrick Industries is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for Patrick Industries (1 is a bit concerning!) and we strongly recommend you look at them before investing.
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, but not derivative transactions.
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