Don't Ignore The Insider Selling In Parker-Hannifin

We wouldn't blame Parker-Hannifin Corporation (NYSE:PH) shareholders if they were a little worried about the fact that Mark Hart, the Executive Vice President of Human Resources & External Affairs recently netted about US$1.2m selling shares at an average price of US$566. That's a big disposal, and it decreased their holding size by 20%, which is notable but not too bad.

View our latest analysis for Parker-Hannifin

Parker-Hannifin Insider Transactions Over The Last Year

The VP, General Counsel & Secretary, Joseph Leonti, made the biggest insider sale in the last 12 months. That single transaction was for US$2.1m worth of shares at a price of US$429 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$591. 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. We note that the biggest single sale was only 22% of Joseph Leonti's holding.

In the last year Parker-Hannifin insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Parker-Hannifin better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Parker-Hannifin insiders own 0.5% of the company, currently worth about US$395m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Parker-Hannifin Insiders?

Insiders haven't bought Parker-Hannifin stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Parker-Hannifin makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Parker-Hannifin. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Parker-Hannifin.

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 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.