Possible Bearish Signals With General Motors Insiders Disposing Stock

Over the past year, many General Motors Company (NYSE:GM) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for General Motors

The Last 12 Months Of Insider Transactions At General Motors

The Chairman & CEO, Mary Barra, made the biggest insider sale in the last 12 months. That single transaction was for US$16m worth of shares at a price of US$53.16 each. That means that an insider was selling shares at around the current price of US$48.37. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

In the last twelve months insiders purchased 37.00k shares for US$1.7m. But insiders sold 1.33m shares worth US$63m. In total, General Motors 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like General Motors 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 General Motors Have Bought Stock Recently

Over the last quarter, General Motors insiders have spent a meaningful amount on shares. We can see that insider Alfred Kelly paid US$608k for shares in the company. No-one sold. This makes one think the business has some good points.

Insider Ownership Of General Motors

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. General Motors insiders own 0.2% of the company, currently worth about US$103m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At General Motors Tell Us?

It is good to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. The recent buying by an insider , along with high insider ownership, suggest that General Motors insiders are fairly aligned, and optimistic. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 2 warning signs (1 is concerning!) that you ought to be aware of before buying any shares in General Motors.

But note: General Motors 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.