Don't Ignore The Insider Selling In Standard Motor Products

Anyone interested in Standard Motor Products, Inc. (NYSE:SMP) should probably be aware that the Executive VP & Chief Commercial Officer, Dale Burks, recently divested US$299k worth of shares in the company, at an average price of US$27.20 each. The eyebrow raising move amounted to a reduction of 15% in their holding.

See our latest analysis for Standard Motor Products

Standard Motor Products Insider Transactions Over The Last Year

In fact, the recent sale by Dale Burks was the biggest sale of Standard Motor Products shares made by an insider individual in the last twelve months, according to our records. So we know that an insider sold shares at around the present share price of US$26.54. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Standard Motor Products 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!

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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. Insiders own 5.1% of Standard Motor Products shares, worth about US$29m. 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 Standard Motor Products Insiders?

An insider sold Standard Motor Products shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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 3 warning signs for Standard Motor Products you should be aware of, and 1 of them shouldn't be ignored.

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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.