One TransDigm Group Insider Has Reduced Their Stake

Insiders were net sellers of TransDigm Group Incorporated's (NYSE:TDG ) stock during the past year. That is, insiders sold more stock than they bought.

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.

See our latest analysis for TransDigm Group

TransDigm Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Director, Robert Small, for US$3.3m worth of shares, at about US$742 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$851. 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. 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. It is worth noting that this sale was only 4.6% of Robert Small's holding. Robert Small was the only individual insider to sell shares in the last twelve months.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership Of TransDigm Group

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 TransDigm Group insiders own 0.4% of the company, worth about US$210m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At TransDigm Group Tell Us?

The fact that there have been no TransDigm Group insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of TransDigm Group, we can't say the same about the selling of shares. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that TransDigm Group has 2 warning signs and it would be unwise to ignore these.

Of course TransDigm Group may not be the best stock to buy. So you may wish to see this free collection of high quality 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.