Trade Alert: Martin Harrell At Beacon Roofing Supply, Inc. (NASDAQ:BECN), Has Just Spent US$500k Buying A Small Number of Shares

Investors who take an interest in Beacon Roofing Supply, Inc. (NASDAQ:BECN) should definitely note that insider Martin Harrell recently paid US$55.50 per share to buy US$500k worth of the stock. However, it only increased shareholding by a small percentage, and it wasn’t a huge purchase by absolute value, either.

Our analysis indicates that BECN is potentially undervalued!

The Last 12 Months Of Insider Transactions At Beacon Roofing Supply

Notably, that recent purchase by Martin Harrell is the biggest insider purchase of Beacon Roofing Supply shares that we’ve seen in the last year. So it’s clear an insider wanted to buy, at around the current price, which is US$58.16. 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. If someone buys shares at well below current prices, it’s a good sign on balance, but keep in mind they may no longer see value. In this case we’re pleased to report that the insider bought shares at close to current prices. Martin Harrell was the only individual insider to buy during the last year.

The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NasdaqGS:BECN Insider Trading Volume November 16th 2022

Beacon Roofing Supply is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.5% of Beacon Roofing Supply shares, worth about US$17m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Beacon Roofing Supply Tell Us?

It’s certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Beacon Roofing Supply we think they are probably pretty confident of a bright future. 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. To assist with this, we’ve discovered 2 warning signs that you should run your eye over to get a better picture of Beacon Roofing Supply.

But note: Beacon Roofing Supply 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.

Valuation is complex, but we’re helping make it simple.

Find out whether Beacon Roofing Supply is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.

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