General Motors Insiders Sell US$44m Of Stock, Possibly Signalling Caution

Many General Motors Company (NYSE:GM) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. 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, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for General Motors

The Last 12 Months Of Insider Transactions At General Motors

In the last twelve months, the biggest single sale by an insider was when the Chairman & CEO, Mary Barra, sold US$14m worth of shares at a price of US$47.00 per share. That means that even when the share price was below the current price of US$49.78, an insider wanted to cash in some shares. 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. This single sale was just 20% of Mary Barra's stake.

All up, insiders sold more shares in General Motors than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insiders At General Motors Have Sold Stock Recently

We've seen more insider selling than insider buying at General Motors recently. In that time, insiders dumped US$17m worth of shares. On the flip side, Executive VP & CFO Paul Jacobson spent US$1.1m on purchasing shares (as mentioned above) . Generally this level of net selling might be considered a bit bearish.

Does General Motors Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that General Motors insiders own 0.2% of the company, worth about US$122m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The General Motors Insider Transactions Indicate?

The stark truth for General Motors is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that General Motors is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing General Motors. Be aware that General Motors is showing 3 warning signs in our investment analysis, and 2 of those can't be ignored...

Of course General Motors 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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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.