Don't Ignore The Insider Selling In Ryder System

We wouldn't blame Ryder System, Inc. (NYSE:R) shareholders if they were a little worried about the fact that Thomas Havens, the President of Global Fleet Management Solutions recently netted about US$1.6m selling shares at an average price of US$283. That sale reduced their total holding by 17% which is hardly insignificant, but far from the worst we've seen.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Ryder System Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, E. Smith, sold US$6.7m worth of shares at a price of US$210 per share. That means that even when the share price was below the current price of US$270, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 95% of E. Smith's holding.

In the last year Ryder System insiders didn't buy any company stock. 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!

View our latest analysis for Ryder System

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Does Ryder System Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Ryder System insiders own 3.4% of the company, currently worth about US$369m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Ryder System Insider Transactions Indicate?

Insiders haven't bought Ryder System stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. On the plus side, Ryder System makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Ryder System you should be aware of, and 1 of these is concerning.

Of course Ryder System 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.