Some Commercial Metals Company (NYSE:CMC) shareholders may be a little concerned to see that insider Jennifer Durbin recently sold a substantial US$2.0m worth of stock at a price of US$79.97 per share. That sale reduced their total holding by 42% which is hardly insignificant, but far from the worst we've seen.

Commercial Metals Insider Transactions Over The Last Year

In fact, the recent sale by Jennifer Durbin was the biggest sale of Commercial Metals shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$80.56, 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. 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 42% of Jennifer Durbin's holding.

In the last twelve months insiders purchased 12.30k shares for US$644k. But insiders sold 31.28k shares worth US$2.4m. In total, Commercial Metals insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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Does Commercial Metals Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Commercial Metals insiders own about US$85m worth of shares. That equates to 0.9% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Commercial Metals Insiders?

The insider sales have outweighed the insider buying, at Commercial Metals, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Commercial Metals is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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.

But note: Commercial Metals may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.