Don't Ignore The Fact That This Insider Just Sold Some Shares In Emerson Electric Co. (NYSE:EMR)

By
Simply Wall St
Published
November 26, 2020
NYSE:EMR

Some Emerson Electric Co. (NYSE:EMR) shareholders may be a little concerned to see that the Senior EVP & CFO, Frank Dellaquila, recently sold a substantial US$789k worth of stock at a price of US$78.91 per share. However, that sale only accounted for 2.5% of their holding, so arguably it doesn't say much about their conviction.

Check out our latest analysis for Emerson Electric

Emerson Electric Insider Transactions Over The Last Year

Notably, that recent sale by Frank Dellaquila is the biggest insider sale of Emerson Electric shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of US$78.26. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

In total, Emerson Electric insiders sold more 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NYSE:EMR Insider Trading Volume November 26th 2020

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

Does Emerson Electric Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Emerson Electric insiders own 0.7% of the company, worth about US$340m. 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 Emerson Electric Insiders?

Insiders sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 2 warning signs for Emerson Electric that deserve your attention before buying any shares.

Of course Emerson Electric 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, 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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