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John Morikis Is The Chairman & CEO of The Sherwin-Williams Company (NYSE:SHW) And Just Spent US$500k On Shares

Those following along with The Sherwin-Williams Company (NYSE:SHW) will no doubt be intrigued by the recent purchase of shares by John Morikis, Chairman & CEO of the company, who spent a stonking US$500k on stock at an average price of US$227. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 0.6%.

See our latest analysis for Sherwin-Williams

Sherwin-Williams Insider Transactions Over The Last Year

In fact, the recent purchase by Chairman & CEO John Morikis was not their only acquisition of Sherwin-Williams shares this year. Earlier in the year, they paid US$260 per share in a US$519k purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$237). 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. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

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Over the last year, we can see that insiders have bought 5.21k shares worth US$1.3m. But insiders sold 1.54k shares worth US$401k. In the last twelve months there was more buying than selling by Sherwin-Williams insiders. 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!

insider-trading-volume
insider-trading-volume

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Sherwin-Williams insiders own 0.3% of the company, worth about US$173m. 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 Does This Data Suggest About Sherwin-Williams Insiders?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Sherwin-Williams insiders are well aligned, and quite possibly think the share price is too low. Looks promising! 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 assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Sherwin-Williams.

Of course Sherwin-Williams may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

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