Some DXP Enterprises, Inc. (NASDAQ:DXPE) shareholders may be a little concerned to see that the Independent Director, Timothy Halter, recently sold a substantial US$969k worth of stock at a price of US$142 per share. That sale reduced their total holding by 19% which is hardly insignificant, but far from the worst we've seen.

DXP Enterprises Insider Transactions Over The Last Year

The Senior VP & COO, Nicholas Little, made the biggest insider sale in the last 12 months. That single transaction was for US$4.0m worth of shares at a price of US$87.73 each. That means that an insider was selling shares at slightly below the current price (US$150). 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. We note that the biggest single sale was only 5.4% of Nicholas Little's holding.

Over the last year we saw more insider selling of DXP Enterprises shares, than buying. 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!

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 Of DXP Enterprises

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. I reckon it's a good sign if insiders own a significant number of shares in the company. DXP Enterprises insiders own 18% of the company, currently worth about US$402m 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 Does This Data Suggest About DXP Enterprises Insiders?

Insiders haven't bought DXP Enterprises stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, DXP Enterprises makes money, and is growing profits. 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 help with this, we've discovered 2 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in DXP Enterprises.

But note: DXP Enterprises 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.