Limestone manufacturer USLM slides after insider sale

Insiders are selling more shares than they are buying recently / Photo: Shutterstock

Quotes on shares of limestone and lime products manufacturer United States Lime & Minerals (USLM) dropped 14% in after-hours trading on Monday, August 26. Earlier in the day, the company announced that board member Richard Cardin had sold 12,000 shares for just under $1 million — nearly half of the shares he owned.

Details

On Monday, USLM stock finished the day at $81.40 per share, basically flat versus the previous closing price. In after-hours trading, however, it started to slide, dropping 14% to $70.00 per share. The stock is still up almost 77% since the beginning of the year and 91% over the last 12 months.

The company reported on Monday that board member Richard Cardin had sold 12,000 shares at prices ranging from $77.60 to $78.05 per share on Thursday, August 22. According to Investing.com, the total value of the transaction amounted to $934,000. After the sale, Cardin still retains 14,300 shares.

Over the past year, USLM insiders have sold more shares than they have bought, notes GuruFocus. Simply Wall St points out that it might be a red flag when multiple insiders sell stock, arguing that high insider ownership often makes company leadership more mindful of shareholder interests.

Context

United States Lime & Minerals manufactures limestone and lime products, supplying municipal water treatment facilities, road and building contractors, and the agriculture industry, among other clients. It operates plants and distribution facilities in several U.S. states through its subsidiaries. Through one of them the parent has royalty and nonoperating working interests in oil and gas wells in Texas.

The company has a strong financial position and no debt, notes Simply Wall St. In August, it spotlighted USLM stock as an “undiscovered gem” with strong growth potential, recalling that the company’s earnings have been growing at a double-digit pace in recent years. In the second quarter of 2024, revenue came in 3.5% higher year over year at $76.5 million, with diluted earnings per share rising nearly 32% to $0.91, the company reported. At that time, it announced a dividend of $0.05 per share.