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Many General Motors Company (NYSE:GM) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. 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 we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At General Motors
The Chairman & CEO, Mary Barra, made the biggest insider sale in the last 12 months. That single transaction was for US$16m worth of shares at a price of US$53.16 each. So what is clear is that an insider saw fit to sell at around the current price of US$50.37. 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.
In the last twelve months insiders purchased 37.00k shares for US$1.7m. But they sold 1.16m shares for US$55m. Over the last year we saw more insider selling of General Motors shares, than buying. 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!
View our latest analysis for General Motors
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Does General Motors Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. General Motors insiders own 0.2% of the company, currently worth about US$120m based on the recent share price. 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 Does This Data Suggest About General Motors Insiders?
The fact that there have been no General Motors insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the General Motors insiders selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 3 warning signs for General Motors (2 are potentially serious!) that we believe deserve your full attention.