The significant amount of Bearish Signals shares sold by multiple insiders at Cactus, Inc. (NYSE: WHD) over the past year might have raised concerns among investors. When analyzing insider transactions, understanding whether insiders are buying or selling is crucial, as the latter can be subject to various interpretations. Investors should pay close attention if several insiders are consistently selling shares over a specific period.
While insider transactions are not the sole determinant in long-term investing, it is logical to consider whether insiders are buying or selling shares.
Bearish Signals
Reviewing the last twelve months of insider transactions at Cactus, the most substantial sale came from President & Director Joel Bender, who sold shares valued at US$14 million at approximately US$56.18 per share. Although insider selling is generally viewed negatively, the impact is more significant if shares are sold at a lower price. The positive aspect is that the sell-off occurred above the latest price of US$44.52, providing less insight into insider confidence at current levels.
Notably, insiders at Cactus did not acquire any shares over the past year. A visual representation of insider transactions (by both companies and individuals) over the last 12 months is available below.
Many investors assess the insider ownership of a company to gauge management’s alignment with shareholders. Cactus insiders collectively own 0.5% of the company, valued at approximately US$18 million. While this ownership level is solid but not exceptional, it does signify some alignment between management and smaller shareholders.
The absence of recent insider transactions at Cactus does not raise significant concerns. The selling activity by Cactus insiders does not provide much encouragement. However, the modest level of insider ownership does offer some comfort. While understanding insider actions is essential, it is equally vital to consider the specific risks a company may be facing. At Simply Wall St, we have identified one warning sign for Cactus that deserves attention before considering any share purchases.
It’s important to note that, for the purposes of this article, insiders refer to individuals who report their transactions to the relevant regulatory body. The analysis considers open market transactions and private dispositions of direct interests only, excluding derivative transactions or indirect interests.
