Don't Ignore The Insider Selling In Modine Manufacturing

We wouldn't blame Modine Manufacturing Company (NYSE:MOD) shareholders if they were a little worried about the fact that Marsha Williams, the Independent Chairman & Lead Director recently netted about US$3.8m selling shares at an average price of US$110. That sale reduced their total holding by 20% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Modine Manufacturing

Modine Manufacturing Insider Transactions Over The Last Year

In fact, the recent sale by Marsha Williams was the biggest sale of Modine Manufacturing shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$112, an insider wanted to cash in some shares. 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. 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 20% of Marsha Williams's holding.

Modine Manufacturing 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership Of Modine Manufacturing

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Modine Manufacturing insiders own 2.1% of the company, worth about US$118m. 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 Does This Data Suggest About Modine Manufacturing Insiders?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for Modine Manufacturing you should be aware of.

Of course Modine Manufacturing 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.