We wouldn’t blame Parker-Hannifin Corporation (NYSE:PH) shareholders if they were a little worried about the fact that Thomas Williams, the Chairman & CEO recently netted about US$5.8m selling shares at an average price of US$181. That’s a big dump, and it decreased their holding size by 19.5%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At Parker-Hannifin
In fact, the recent sale by Chairman & CEO Thomas Williams was not their only sale of Parker-Hannifin shares this year. Earlier in the year, they fetched US$181 per share in a -US$5.8m sale. That means that even when the share price was slightly below the current price of US$182, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it’s only a weak signal. This single sale was just 19.5% of Thomas Williams’s stake.
In the last twelve months insiders purchased 3120 shares for US$496k. But insiders sold 40385 shares worth US$7.2m. All up, insiders sold more shares in Parker-Hannifin than they bought, over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Insider Ownership of Parker-Hannifin
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It’s great to see that Parker-Hannifin insiders own 0.6% of the company, worth about US$145m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Parker-Hannifin Insider Transactions Indicate?
Unfortunately, there has been more insider selling of Parker-Hannifin 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 Parker-Hannifin is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in Parker-Hannifin, you should check out this free report on analyst forecasts for the company.
Of course Parker-Hannifin 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.
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