From what we can see, insiders were net sellers in TransDigm Group Incorporated's (NYSE:TDG ) during the past 12 months. That is, insiders sold the stock in greater numbers than they purchased it.
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.
The Last 12 Months Of Insider Transactions At TransDigm Group
In the last twelve months, the biggest single sale by an insider was when the Independent Director, Robert Small, sold US$3.3m worth of shares at a price of US$742 per share. So what is clear is that an insider saw fit to sell at around the current price of US$714. 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. The only individual insider seller over the last year was Robert Small.
The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like TransDigm Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
TransDigm Group Insiders Are Selling The Stock
The last quarter saw substantial insider selling of TransDigm Group shares. Specifically, Independent Director Robert Small ditched US$3.3m 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.
Insider Ownership Of TransDigm Group
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that TransDigm Group insiders own 0.5% of the company, worth about US$176m. 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 Does This Data Suggest About TransDigm Group Insiders?
An insider sold TransDigm Group shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, TransDigm Group makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for TransDigm Group (of which 2 shouldn't be ignored!) you should know about.
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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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.
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