Don't Ignore The Insider Selling In Stryker

We wouldn't blame Stryker Corporation (NYSE:SYK) shareholders if they were a little worried about the fact that Ronda Stryker, the Independent Director recently netted about US$78m selling shares at an average price of US$392. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 1.1%.

Check out our latest analysis for Stryker

The Last 12 Months Of Insider Transactions At Stryker

In fact, the recent sale by Independent Director Ronda Stryker was not their only sale of Stryker shares this year. Earlier in the year, they fetched US$346 per share in a -US$100m sale. That means that an insider was selling shares at slightly below the current price (US$391). 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 1.6% of Ronda Stryker's holding.

Stryker 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Stryker insiders own about US$15b worth of shares (which is 10% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Stryker Tell Us?

Insiders sold Stryker shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. 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 Stryker. At Simply Wall St, we found 2 warning signs for Stryker that deserve your attention before buying any shares.

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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.