Possible bearish signals as Snap-on Incorporated (NYSE:SNA) insiders disposed of US$1.3m worth of stock

By
Simply Wall St
Published
May 14, 2022
NYSE:SNA
Source: Shutterstock

Over the past year, many Snap-on Incorporated (NYSE:SNA) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Snap-on

Snap-on Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Karen Daniel, sold US$716k worth of shares at a price of US$222 per share. So what is clear is that an insider saw fit to sell at around the current price of US$216. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Snap-on insiders didn't buy any shares 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!

insider-trading-volume
NYSE:SNA Insider Trading Volume May 14th 2022

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 Snap-on

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Snap-on insiders own about US$192m worth of shares (which is 1.7% of the company). 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 Do The Snap-on Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Snap-on shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Snap-on insider transactions don't fill us with confidence. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Snap-on.

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, but not derivative transactions.

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