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Insiders seem to have made the most of their holdings by selling US$3.5m worth of Caterpillar Inc. (NYSE:CAT) stock at an average sell price of US$217 during the past year. The company's market valuation decreased by US$6.3b after the stock price dropped 6.5% over the past week, but insiders were spared from painful losses.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Caterpillar
The Last 12 Months Of Insider Transactions At Caterpillar
In the last twelve months, the biggest single sale by an insider was when the Group President of Energy & Transportation Segment, Joseph Creed, sold US$1.0m worth of shares at a price of US$204 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$171. So it is hard to draw any strong conclusion from it.
Over the last year we saw more insider selling of Caterpillar shares, than buying. 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of Caterpillar
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Caterpillar insiders own about US$177m worth of shares (which is 0.2% 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.
So What Do The Caterpillar Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Caterpillar shares in the last quarter. While we feel good about high insider ownership of Caterpillar, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Caterpillar that deserve your attention before buying any shares.
Of course Caterpillar may not be the best stock to buy. So you may wish to see this free collection of high quality companies.