Investors may wish to note that an insider of Eaton Corporation plc, Joao Faria, recently netted US$87k from selling stock, receiving an average price of US$86.89. However we note that the sale only shrunk their holding by 1.9%.
View our latest analysis for Eaton
Eaton Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Vice Chairman and Chief Financial & Planning Officer, Richard Fearon, for US$2.5m worth of shares, at about US$80.3 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$84.98. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it’s only a weak signal. We note that the biggest single sale was only 1180% of Richard Fearon’s holding.
Happily, we note that in the last year insiders paid US$180k for 2285 shares. On the other hand they divested 138653 shares, for US$11m. All up, insiders sold more shares in Eaton than they bought, over the last year. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Eaton Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.3% of Eaton shares, worth about US$91m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Eaton Tell Us?
Insiders haven’t bought Eaton stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn’t give us much comfort. While insiders do own shares, they don’t own a heap, and they have been selling. So we’d only buy after careful consideration. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Eaton.
Of course Eaton 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.