This Insider Has Just Sold Shares In Illinois Tool Works Inc. (NYSE:ITW)

By
Simply Wall St
Published
May 15, 2022
NYSE:ITW
Source: Shutterstock

Anyone interested in Illinois Tool Works Inc. (NYSE:ITW) should probably be aware that the Executive Vice President of Automotive OEM, Lei Schlitz, recently divested US$205k worth of shares in the company, at an average price of US$205 each. However, the silver lining is that the sale only reduced their total holding by 7.5%, so we're hesitant to read anything much into it, on its own.

View our latest analysis for Illinois Tool Works

Illinois Tool Works Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Director Jay Henderson bought US$2.4m worth of shares at a price of US$236 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$208). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Jay Henderson was the only individual insider to buy shares in the last twelve months.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:ITW Insider Trading Volume May 15th 2022

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Illinois Tool Works

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Illinois Tool Works insiders own 0.3% of the company, worth about US$204m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Illinois Tool Works Tell Us?

An insider sold Illinois Tool Works shares recently, but they didn't buy any. But we take heart from prior transactions. And insider ownership remains quite considerable. So we're happy to look past recent trading. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Illinois Tool Works. Every company has risks, and we've spotted 2 warning signs for Illinois Tool Works you should know about.

Of course Illinois Tool Works 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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