Investors may wish to note that the Senior Vice President of Human Resources of Barnes Group Inc., Dawn Edwards, recently netted US$61k from selling stock, receiving an average price of US$53.04. However we note that the sale only shrunk their holding by 1.3%.
Barnes Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Independent Chairman of the Board, Thomas Barnes, for US$68k worth of shares, at about US$45.06 per share. That means that even when the share price was below the current price of US$52.47, an insider wanted to cash in some shares. 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. 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. This single sale was just 0.05% of Thomas Barnes’s stake.
Over the last year we saw more insider selling of Barnes Group shares, than buying. They sold for an average price of about US$44.78. It’s not particularly great to see insiders were selling shares at below recent prices. But we wouldn’t put too much weight on the insider selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Barnes Group
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Barnes Group insiders own about US$192m worth of shares (which is 7.4% of the company). 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 Barnes Group Insiders?
The insider sales have outweighed the insider buying, at Barnes Group, in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. 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. 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. In terms of investment risks, we’ve identified 3 warning signs with Barnes Group and understanding these should be part of your investment process.
Of course Barnes Group 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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