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 VP of Information Technology & Chief Information Officer, Ray Nicholas, recently divested US$346k worth of shares in the company, at an average price of US$38.01 each. The eyebrow raising move amounted to a reduction of 15% in their holding.

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The Last 12 Months Of Insider Transactions At Standard Motor Products

In fact, the recent sale by Ray Nicholas was the biggest sale of Standard Motor Products shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of US$37.99. 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.

All up, insiders sold more shares in Standard Motor Products than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Standard Motor Products

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Insider Ownership Of Standard Motor Products

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. Standard Motor Products insiders own about US$44m worth of shares. That equates to 5.3% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Standard Motor Products Tell Us?

Insiders sold Standard Motor Products shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Standard Motor Products is profitable and growing, we're not too worried by this. 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. Our analysis shows 3 warning signs for Standard Motor Products (1 can't be ignored!) and we strongly recommend you look at these before investing.

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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.