TriMas Corporation (NASDAQ:TRS) shareholders (or potential shareholders) will be happy to see that the Independent Director, Shahrokh Sedaghat, recently bought a whopping US$9.2m worth of stock, at a price of US$25.48. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 6.9%.
Our free stock report includes 1 warning sign investors should be aware of before investing in TriMas. Read for free now.
TriMas Insider Transactions Over The Last Year
In fact, the recent purchase by Independent Director Shahrokh Sedaghat was not their only acquisition of TriMas shares this year. Earlier in the year, they paid US$27.73 per share in a US$84m purchase. That means that an insider was happy to buy shares at above the current price of US$26.08. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Over the last year, we can see that insiders have bought 4.70m shares worth US$119m. But insiders sold 4.22k shares worth US$102k. In the last twelve months there was more buying than selling by TriMas insiders. 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!
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There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership
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. We usually like to see fairly high levels of insider ownership. TriMas insiders own about US$205m worth of shares (which is 20% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About TriMas Insiders?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest TriMas insiders are well aligned, and quite possibly think the share price is too low. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - TriMas has 1 warning sign we think you should be aware of.