Selling US$21m worth of stock earlier this year was a lucrative decision for Meritor, Inc. (NYSE:MTOR) insiders

By
Simply Wall St
Published
October 11, 2021
NYSE:MTOR
Source: Shutterstock

Even though Meritor, Inc. (NYSE:MTOR) stock gained 13% last week, insiders who sold US$21m worth of stock over the past year are probably better off. Selling at an average price of US$29.56, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Meritor

Meritor Insider Transactions Over The Last Year

The Executive Chairman of the Board, 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. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$25.51. So it may not tell us anything about how insiders feel about the current share price.

In the last year Meritor insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NYSE:MTOR Insider Trading Volume October 11th 2021

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).

Insider Ownership of Meritor

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 1.8% of Meritor shares, worth about US$33m. 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?

It doesn't really mean much that no insider has traded Meritor shares in the last quarter. Our analysis of Meritor insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Meritor. For example - Meritor has 2 warning signs we think you should be aware of.

But note: Meritor 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, but not derivative transactions.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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