It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in W.W. Grainger, Inc.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
W.W. Grainger Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the , Eric Tapia, sold US$519k worth of shares at a price of US$338 per share. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$270. So it may not shed much light on insider confidence at current levels.
We note that in the last year insiders divested 2714 shares for a total of US$928k. Insiders in W.W. Grainger didn’t buy any shares in the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at W.W. Grainger Have Sold Stock Recently
We have seen a bit of insider selling at W.W. Grainger, over the last three months. Eric Tapia sold just US$49k worth of shares in that time. It’s not great to see insider selling, nor the lack of recent buyers. But the amount sold isn’t enough for us to put any weight on it.
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. W.W. Grainger insiders own 19% of the company, currently worth about US$2.9b based on the recent share price. 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 W.W. Grainger Insider Transactions Indicate?
We did not see any insider buying in the last three months, but we did see selling. But the sales were small, so we’re not concerned. It’s heartening that insiders own plenty of stock, but we’d like to see more insider buying, since the last year of W.W. Grainger insider transactions don’t fill us with confidence. Of course, the future is what matters most.