For Park-Ohio Holdings Insiders, Selling US$1.7m Of Shares Was A Smart Move

While it’s been a great week for Park-Ohio Holdings Corp. (NASDAQ:PKOH) shareholders after stock gained 12%, they should consider it with a grain of salt. In spite of the relatively cheap prices, insiders made the decision to sell US$1.7m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Park-Ohio Holdings

Park-Ohio Holdings Insider Transactions Over The Last Year

The Independent Director, Daniel Moore, made the biggest insider sale in the last 12 months. That single transaction was for US$402k worth of shares at a price of US$24.55 each. That means that an insider was selling shares at slightly below the current price (US$33.39). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. We note that the biggest single sale was only 23% of Daniel Moore's holding.

In the last twelve months insiders purchased 30.88k shares for US$760k. On the other hand they divested 66.71k shares, for US$1.7m. All up, insiders sold more shares in Park-Ohio Holdings 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does Park-Ohio Holdings Boast High 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. Park-Ohio Holdings insiders own about US$128m worth of shares (which is 34% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Park-Ohio Holdings Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of Park-Ohio Holdings, we can't say the same about the selling of shares. 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. For instance, we've identified 3 warning signs for Park-Ohio Holdings (1 is a bit concerning) you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.