We wouldn't blame Eagle Materials Inc. (NYSE:EXP) shareholders if they were a little worried about the fact that Margot Carter, the Independent Director recently netted about US$1.1m selling shares at an average price of US$205. That sale reduced their total holding by 44% which is hardly insignificant, but far from the worst we've seen.

The Last 12 Months Of Insider Transactions At Eagle Materials

Notably, that recent sale by Margot Carter is the biggest insider sale of Eagle Materials shares that we've seen in the last year. That means that an insider was selling shares at below the current price (US$216). 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 only 44% of Margot Carter's holding.

Over the last year we saw more insider selling of Eagle Materials shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find hidden gems this free list of small cap 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 1.3% of Eagle Materials shares, worth about US$83m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Eagle Materials Tell Us?

An insider sold Eagle Materials shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company.

Of course Eagle Materials 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.

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.