Dorman Products Insiders Sold US$29m Of Shares Suggesting Hesitancy

Over the past year, many Dorman Products, Inc. (NASDAQ:DORM) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Dorman Products

Dorman Products Insider Transactions Over The Last Year

In fact, the recent sale by Founder & Non-Executive Chairman Steven Berman was not their only sale of Dorman Products shares this year. Earlier in the year, they fetched US$94.01 per share in a -US$7.1m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$129. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 2.9% of Steven Berman's stake.

Insiders in Dorman Products didn't buy any shares in the last year. You can see the insider transactions (by companies and 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!

I will like Dorman Products better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Dorman Products Have Sold Stock Recently

The last quarter saw substantial insider selling of Dorman Products shares. Specifically, insiders ditched US$3.4m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Dorman Products

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. Dorman Products insiders own about US$552m worth of shares (which is 14% of the company). 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 Do The Dorman Products Insider Transactions Indicate?

Insiders haven't bought Dorman Products stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But since Dorman Products is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. You'd be interested to know, that we found 1 warning sign for Dorman Products and we suggest you have a look.

Of course Dorman Products 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 of direct interests only, but not derivative transactions or indirect interests.

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