Don't Ignore The Insider Selling In RTX

We wouldn't blame RTX Corporation (NYSE:RTX) shareholders if they were a little worried about the fact that Kevin DaSilva, a company insider, recently netted about US$1.4m selling shares at an average price of US$156. That's a big disposal, and it decreased their holding size by 22%, which is notable but not too bad.

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RTX Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Advisor, Gregory Hayes, sold US$13m worth of shares at a price of US$125 per share. That means that an insider was selling shares at slightly below the current price (US$157). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 16% of Gregory Hayes's holding.

All up, insiders sold more shares in RTX than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for RTX

I will like RTX 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

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. It's great to see that RTX insiders own 0.08% of the company, worth about US$166m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The RTX Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, RTX makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing RTX. To that end, you should learn about the 3 warning signs we've spotted with RTX (including 1 which is a bit concerning).

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 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.