Don't Ignore The Fact That This Insider Just Sold Some Shares In Meritor, Inc. (NYSE:MTOR)

We wouldn't blame Meritor, Inc. (NYSE:MTOR) shareholders if they were a little worried about the fact that Ivor Evans, the Independent Director recently netted about US$3.2m selling shares at an average price of US$32.24. That's a big disposal, and it decreased their holding size by 23%, which is notable but not too bad.

Check out our latest analysis for Meritor

The Last 12 Months Of Insider Transactions At Meritor

The President, Jeffrey Craig, made the biggest insider sale in the last 12 months. That single transaction was for US$11m worth of shares at a price of US$28.14 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$31.34. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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. This single sale was 63% of Jeffrey Craig's stake.

Meritor insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Does Meritor Boast High 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. Insiders own 2.2% of Meritor shares, worth about US$51m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Meritor Insider Transactions Indicate?

Insiders haven't bought Meritor stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. On the plus side, Meritor makes money, and is growing profits. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 3 warning signs for Meritor you should be aware of, and 1 of these doesn't sit too well with us.

Of course Meritor 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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