This Insider Has Just Sold Shares In First Merchants Corporation (NASDAQ:FRME)

We'd be surprised if First Merchants Corporation (NASDAQ:FRME) shareholders haven't noticed that the Independent Director, Michael Marhenke, recently sold US$450k worth of stock at US$50.00 per share. The eyebrow raising move amounted to a reduction of 25% in their holding.

See our latest analysis for First Merchants

The Last 12 Months Of Insider Transactions At First Merchants

Notably, that recent sale by Michael Marhenke is the biggest insider sale of First Merchants shares that we've seen in the last year. That means that an insider was selling shares at around the current price of US$48.60. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Over the last year, we can see that insiders have bought 10.41k shares worth US$268k. But insiders sold 26.82k shares worth US$989k. All up, insiders sold more shares in First Merchants than they bought, 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that First Merchants insiders own 1.4% of the company, worth about US$37m. 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 First Merchants Tell Us?

The insider sales have outweighed the insider buying, at First Merchants, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! While we like knowing 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. In terms of investment risks, we've identified 2 warning signs with First Merchants and understanding these should be part of your investment process.

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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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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