While L.B. Foster Company (NASDAQ:FSTR) shareholders have had a good week with the stock up 15%, insiders can't say the same having sold stock over the past year. They could have sold their shares at much higher prices and gotten a better return on their investment if they had waited.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At L.B. Foster

Over the last year, we can see that the biggest insider sale was by the insider, Brian Kelly, for US$272k worth of shares, at about US$27.15 per share. That means that an insider was selling shares at slightly below the current price (US$36.60). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 15% of Brian Kelly's holding. Brian Kelly was the only individual insider to sell over the last year.

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!

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Does L.B. Foster Boast High Insider Ownership?

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. We usually like to see fairly high levels of insider ownership. L.B. Foster insiders own about US$25m worth of shares. That equates to 7.7% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At L.B. Foster Tell Us?

It doesn't really mean much that no insider has traded L.B. Foster shares in the last quarter. We don't take much encouragement from the transactions by L.B. Foster insiders. But we do like the fact that insiders own a fair chunk of the company. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that L.B. Foster has 1 warning sign and it would be unwise to ignore it.

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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.