Insiders At Howmet Aerospace Sold US$134m In Stock, Alluding To Potential Weakness

Over the past year, many Howmet Aerospace Inc. (NYSE:HWM) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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Howmet Aerospace Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Executive Chairman & CEO, John Plant, sold US$126m worth of shares at a price of US$157 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$174. 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 22% of John Plant's holding.

Insiders in Howmet Aerospace didn't buy any shares in 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!

View our latest analysis for Howmet Aerospace

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insiders At Howmet Aerospace Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Howmet Aerospace. In total, Executive VP Lola Lin sold US$2.4m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Howmet Aerospace 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. We usually like to see fairly high levels of insider ownership. Howmet Aerospace insiders own about US$642m worth of shares (which is 0.9% 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 Do The Howmet Aerospace Insider Transactions Indicate?

An insider sold Howmet Aerospace shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. On the plus side, Howmet Aerospace makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Howmet Aerospace. You'd be interested to know, that we found 2 warning signs for Howmet Aerospace and we suggest you have a look.

But note: Howmet Aerospace may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

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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.