Anyone interested in Meritor, Inc. (NYSE:MTOR) should probably be aware that the VP & Chief Accounting Officer, Paul Bialy, recently divested US$186k worth of shares in the company, at an average price of US$24.87 each. The eyebrow raising move amounted to a reduction of 22% in their holding.
Meritor Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the President, Jeffrey Craig, for US$6.4m worth of shares, at about US$25.86 per share. That means that even when the share price was below the current price of US$26.49, an insider wanted to cash in some shares. 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. It is worth noting that this sale was only 29% of Jeffrey Craig's holding.
Meritor insiders didn't buy any shares over the last year. 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!
I will like Meritor better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Meritor insiders own 2.9% of the company, worth about US$56m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Meritor Tell Us?
An insider hasn't bought Meritor stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Meritor. To that end, you should learn about the 2 warning signs we've spotted with Meritor (including 1 which is a bit concerning).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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