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Possible bearish signals as insiders at The Sherwin-Williams Company (NYSE:SHW) dump $1.9 million worth of stock

Over the past year, many The Sherwin-Williams Company (NYSE:SHW) insiders sold a large stake in the company, which may have piqued investor interest. When evaluating insider trades, it is generally more beneficial to know whether insiders are buying or selling, as the latter can be subject to many interpretations. However, shareholders should take a closer look at whether multiple insiders are selling shares over a period of time.

While we don’t think shareholders should simply follow insider trading, we think it makes perfect sense to keep tabs on what insiders are doing.

Check out our latest analysis for Sherwin-Williams

The last 12 months of insider trading at Sherwin-Williams

Over the past year, we can see that the largest insider sale was by insider Brian Padden for US$711,000 worth of stock, at around US$290 per share. While we generally don’t like to see insider selling, it’s more of a concern if the selling takes place at a lower price. It is reassuring that this sale was made at a price well above the current share price of US$244. So this may not tell us anything about what insiders think of the current stock price.

Over the past twelve months, insiders have purchased 3,000 shares for $773,000. On the other hand, they sold 6,400 shares, for 1.9 million dollars. Over the past year, we have seen more insider selling of Sherwin-Williams stock than buying. The chart below shows insider trading (by companies and individuals) over the past year. If you click on the chart, you can see all individual trades including stock price, individual and date!

NYSE: SHW Insider Trading Volume for March 17, 2022

I’d like Sherwin-Williams better if I see big insider buys. In the meantime, watch this free list of growing companies with significant and recent insider buying.

Sherwin-Williams insiders recently bought shares

It’s good to see that Sherwin-Williams insiders have made notable investments in the company’s stock. Overall, two insiders paid US$773,000 for shares in the company – and none were sold. This is a positive point in our book because it implies a certain confidence.

Does Sherwin-Williams boast of owning a high insider level?

Examining the total insider holdings in a company can help you know if they are well aligned with common shareholders. I think it’s a good sign if insiders have a significant number of shares in the company. Sherwin-Williams insiders own approximately $196 million in stock (or 0.3% of the company). Most shareholders would be happy to see this type of insider ownership, as it suggests that management’s incentives are well aligned with those of other shareholders.

So what does this data suggest about Sherwin-Williams insiders?

Recent insider buying is encouraging. But the same cannot be said for the transactions of the last 12 months. Overall, we would prefer to see more sustained buying from directors, but with significant insider participation and more recent buying, Sherwin-Williams insiders are reasonably well aligned and optimistic about the future. While we like to know what’s going on with insider ownership and trading, we also make sure to consider the risks a stock faces before making any investment decisions. Example: we have identified 2 warning signs for Sherwin-Williams you should be aware.

If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of interesting companies, which have a HIGH return on equity and a low indebtedness.

For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.