This Insider Has Just Sold Shares In Dorman Products

Some Dorman Products, Inc. (NASDAQ:DORM) shareholders may be a little concerned to see that the Founder & Non-Executive Chairman, Steven Berman, recently sold a substantial US$6.9m worth of stock at a price of US$117 per share. However, that sale only accounted for 4.4% of their holding, so arguably it doesn't say much about their conviction.

See 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. They previously made an even bigger sale of -US$7.1m worth of shares at a price of US$94.01 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$118. 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 2.9% of Steven Berman's stake.

In total, Dorman Products insiders sold more than they bought over 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

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. We usually like to see fairly high levels of insider ownership. Dorman Products insiders own about US$403m worth of shares (which is 11% 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 Does This Data Suggest About Dorman Products Insiders?

Insiders haven't bought Dorman Products stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Dorman Products is growing earnings. 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. Case in point: We've spotted 2 warning signs for Dorman Products you should be aware of.

But note: Dorman Products may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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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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.