Emerson Electric Insiders Placed Bullish Bets Worth US$2.11m

Over the last year, a good number of insiders have significantly increased their holdings in Emerson Electric Co. (NYSE:EMR). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Emerson Electric

The Last 12 Months Of Insider Transactions At Emerson Electric

Over the last year, we can see that the biggest insider sale was by the Executive VP & COO, Ram Krishnan, for US$1.2m worth of shares, at about US$96.09 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$104. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 7.9% of Ram Krishnan's holding.

Happily, we note that in the last year insiders paid US$2.1m for 24.40k shares. But insiders sold 19.05k shares worth US$1.9m. Overall, Emerson Electric insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

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. It's great to see that Emerson Electric insiders own 0.4% of the company, worth about US$219m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Emerson Electric Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Emerson Electric insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Emerson Electric. While conducting our analysis, we found that Emerson Electric has 1 warning sign and it would be unwise to ignore it.

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 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.