Some Cactus, Inc. (NYSE:WHD) shareholders may be a little concerned to see that the Executive VP & CEO of the Spoolable Pipe Segment, Stephen Tadlock, recently sold a substantial US$2.1m worth of stock at a price of US$61.35 per share. That sale reduced their total holding by 48% which is hardly insignificant, but far from the worst we've seen.
The Last 12 Months Of Insider Transactions At Cactus
Over the last year, we can see that the biggest insider sale was by the CEO & Chairman of the Board, Scott Bender, for US$31m worth of shares, at about US$52.03 per share. That means that even when the share price was below the current price of US$62.17, 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. We note that the biggest single sale was 93% of Scott Bender's holding.
Insiders in Cactus didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Insider Ownership
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Cactus insiders own about US$26m worth of shares. That equates to 0.5% 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 Do The Cactus Insider Transactions Indicate?
An insider hasn't bought Cactus stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. On the plus side, Cactus makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! 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. Case in point: We've spotted 1 warning sign for Cactus you should be aware of.
But note: Cactus 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
