Investors who take an interest in Transcat, Inc. (NASDAQ:TRNS) should definitely note that the CEO, President & Director, Jaime Irick, recently paid US$101 per share to buy US$230k worth of the stock. However, it only increased shareholding by a small percentage, and it wasn't a huge purchase by absolute value, either.
Transcat Insider Transactions Over The Last Year
The Independent Director, Oksana Dominach, made the biggest insider sale in the last 12 months. That single transaction was for US$626k worth of shares at a price of US$85.60 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$107. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 63% of Oksana Dominach's stake.
Over the last year, we can see that insiders have bought 3.33k shares worth US$329k. On the other hand they divested 7.82k shares, for US$673k. Over the last year we saw more insider selling of Transcat shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Transcat
I will like Transcat better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insider Ownership Of Transcat
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Transcat insiders own about US$26m worth of shares. That equates to 2.5% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Transcat Insiders?
The stark truth for Transcat is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. While it's good to be aware of 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. In terms of investment risks, we've identified 3 warning signs with Transcat and understanding them should be part of your investment process.
But note: Transcat 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 of direct interests only, but not derivative transactions or indirect interests.
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