17-05-2025
Possible Bearish Signals With Sherwin-Williams Insiders Disposing Stock
The fact that multiple The Sherwin-Williams Company (NYSE:SHW) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
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Over the last year, we can see that the biggest insider sale was by the President & GM of Global Supply Chain Division and Consumer Brands Group, Colin Davie, for US$1.0m worth of shares, at about US$360 per share. That means that even when the share price was slightly below the current price of US$364, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 32% of Colin Davie's holding.
In the last year Sherwin-Williams insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Check out our latest analysis for Sherwin-Williams
I will like Sherwin-Williams better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
The last quarter saw substantial insider selling of Sherwin-Williams shares. In total, President & GM of Global Supply Chain Division and Consumer Brands Group Colin Davie dumped US$1.0m 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.
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Sherwin-Williams insiders own 0.3% of the company, currently worth about US$275m 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.
An insider sold Sherwin-Williams shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since Sherwin-Williams is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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 Sherwin-Williams.
Of course Sherwin-Williams may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 of direct interests only, but not derivative transactions or indirect interests.
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