The fact that multiple Post Holdings, Inc. (NYSE:POST) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At Post Holdings

Over the last year, we can see that the biggest insider sale was by the Independent Director, Robert Grote, for US$1.8m worth of shares, at about US$105 per share. That means that even when the share price was below the current price of US$116, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 86% of Robert Grote's holding.

In total, Post Holdings insiders sold more than they bought over the last year. The average sell price was around US$102. It's not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. 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).

Post Holdings Insiders Are Selling The Stock

Over the last three months, we've seen a bit of insider selling at Post Holdings. US$248k worth of shares were sold by insiders. But at least we saw US$226k worth of buying. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

Does Post Holdings Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Post Holdings insiders own 10% of the company, worth about US$708m. 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 Do The Post Holdings Insider Transactions Indicate?

Our data shows a little more insider selling than buying in the last three months. But the difference isn't enough to have us worried. While we gain confidence from high insider ownership of Post Holdings, we can't say the same about their transactions in the last year, in the absence of further purchases. 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. While conducting our analysis, we found that Post Holdings has 1 warning sign and it would be unwise to ignore it.

But note: Post Holdings 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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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.