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Read This Before Buying Barnes Group Inc. (NYSE:B) Shares

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Barnes Group Inc. (NYSE:B).

What Is Insider Selling?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

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Check out our latest analysis for Barnes Group

The Last 12 Months Of Insider Transactions At Barnes Group

Over the last year, we can see that the biggest insider sale was by Principal Accounting Officer Marian Acker for US$496k worth of shares, at about US$63.15 per share. So we know that an insider sold shares at around the present share price of US$49.70. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.

Happily, we note that in the last year insiders paid US$124k for 2.06k shares. But insiders sold 17.23k shares worth US$1.1m. All up, insiders sold more shares in Barnes Group than they bought, over the last year. The sellers received a price of around US$62.27, on average. We don’t gain much confidence from insider selling near the recent share price. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. The chart below shows insider transactions 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!

NYSE:B Insider Trading December 25th 18
NYSE:B Insider Trading December 25th 18

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Barnes Group Insiders Are Selling The Stock

We’ve seen more insider selling than insider buying at Barnes Group recently. In that time, insiders dumped US$127k worth of shares. On the flip side, insiders spent US$4.2k on purchasing shares. We don’t view these transactions as a positive sign.

Insider Ownership of Barnes Group

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Barnes Group insiders own 6.2% of the company, currently worth about US$164m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Barnes Group Insiders?

Unfortunately, there has been more insider selling of Barnes Group stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. It is good to see high insider ownership, but the insider selling leaves us cautious. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course Barnes Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.