TE Connectivity Insiders Sell US$6.8m Of Stock, Possibly Signalling Caution

Over the past year, many TE Connectivity Ltd. (NYSE:TEL) 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 insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for TE Connectivity

The Last 12 Months Of Insider Transactions At TE Connectivity

Over the last year, we can see that the biggest insider sale was by the President of Transportation Solutions, Steven Merkt, for US$4.9m worth of shares, at about US$144 per share. That means that an insider was selling shares at around the current price of US$143. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

TE Connectivity insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insiders At TE Connectivity Have Sold Stock Recently

The last quarter saw substantial insider selling of TE Connectivity shares. Specifically, Executive VP & General Counsel John Jenkins ditched US$895k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does TE Connectivity Boast High Insider Ownership?

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. We usually like to see fairly high levels of insider ownership. Insiders own 0.2% of TE Connectivity shares, worth about US$68m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At TE Connectivity Tell Us?

An insider sold TE Connectivity shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. On the plus side, TE Connectivity makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing TE Connectivity. You'd be interested to know, that we found 1 warning sign for TE Connectivity and we suggest you have a look.

But note: TE Connectivity may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.