President Of BorgWarner Sold 37% Of Their Shares

We wouldn't blame BorgWarner Inc. (NYSE:BWA) shareholders if they were a little worried about the fact that Frederic Lissalde, the President recently netted about US$5.3m selling shares at an average price of US$34.61. That sale reduced their total holding by 37% which is hardly insignificant, but far from the worst we've seen.

View our latest analysis for BorgWarner

BorgWarner Insider Transactions Over The Last Year

In fact, the recent sale by President Frederic Lissalde was not their only sale of BorgWarner shares this year. They previously made an even bigger sale of -US$7.0m worth of shares at a price of US$31.08 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$34.43. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 33% of Frederic Lissalde's holding.

BorgWarner insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. BorgWarner insiders own about US$66m worth of shares. That equates to 0.9% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About BorgWarner Insiders?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, BorgWarner makes money, and is growing profits. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that BorgWarner has 2 warning signs and it would be unwise to ignore these.

But note: BorgWarner 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.