Insiders at Vertex Energy, Inc. (NASDAQ:VTNR) sold US$2.1m worth of stock at an average price of US$16.12 a share over the past year, making the most of their investment. The company's market worth decreased by US$470m over the past week after the stock price dropped 44%, although insiders were able to minimize their losses

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Vertex Energy

The Last 12 Months Of Insider Transactions At Vertex Energy

In the last twelve months, the biggest single sale by an insider was when the Independent Director, David Phillips, sold US$2.1m worth of shares at a price of US$16.33 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$7.80. So it is hard to draw any strong conclusion from it. David Phillips was the only individual insider to sell over the last year.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Vertex Energy better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Vertex Energy Insiders Are Selling The Stock

The last three months saw significant insider selling at Vertex Energy. Specifically, Independent Director David Phillips ditched US$2.1m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Vertex Energy Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Vertex Energy insiders own 20% of the company, currently worth about US$115m based on the recent share price. 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 Vertex Energy Insiders?

An insider sold Vertex Energy shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. 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 Vertex Energy has 3 warning signs and it would be unwise to ignore them.

But note: Vertex Energy 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, but not derivative transactions.

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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.