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Veritiv Corporation's (NYSE:VRTV) recent US$192m market cap decline means a loss of US$10k for insiders who bought this year

Insiders who bought US$392k worth of Veritiv Corporation's (NYSE:VRTV) stock at an average buy price of US$127 over the last year may be disappointed by the recent 10% decrease in the stock. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$382k.

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 Veritiv

Veritiv Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Chairman Stephen Macadam bought US$202k worth of shares at a price of US$127 per share. That means that an insider was happy to buy shares at above the current price of US$123. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Stephen Macadam was the only individual insider to buy during the last year.

Stephen Macadam bought 3.10k shares over the last 12 months at an average price of US$127. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

Veritiv is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Veritiv insiders own about US$93m worth of shares. That equates to 5.4% 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 Do The Veritiv Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Veritiv shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Veritiv and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Veritiv. Every company has risks, and we've spotted 2 warning signs for Veritiv (of which 1 is a bit unpleasant!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, 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.

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