By selling US$1.0m worth of The Sherwin-Williams Company (NYSE:SHW) stock at an average sell price of US$235 over the last year, insiders seemed to have made the most of their holdings. After the stock price dropped 4.6% last week, the company's market value declined by US$2.4b, but insiders were able to mitigate their losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Sherwin-Williams

Sherwin-Williams Insider Transactions Over The Last Year

The insider, Bryan Young, made the biggest insider sale in the last 12 months. That single transaction was for US$607k worth of shares at a price of US$221 each. So we know that an insider sold shares at around the present share price of US$214. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

All up, insiders sold more shares in Sherwin-Williams than they bought, 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!

I will like Sherwin-Williams better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders At Sherwin-Williams Have Sold Stock Recently

We've seen more insider selling than insider buying at Sherwin-Williams recently. We note insider Bryan Young cashed in US$607k worth of shares. On the other hand we note Chairman & CEO John Morikis bought US$500k worth of shares , as previously mentioned . The share price has moved a bit recently, but it's hard to argue that the selling is a positive.

Does Sherwin-Williams 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. It's great to see that Sherwin-Williams insiders own 0.3% of the company, worth about US$171m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Sherwin-Williams Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Sherwin-Williams stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Sherwin-Williams is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing 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. To help with this, we've discovered 2 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Sherwin-Williams.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

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

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here