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Many Emerson Electric Co. (NYSE:EMR) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.
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.
See our latest analysis for Emerson Electric
Emerson Electric Insider Transactions Over The Last Year
The Senior VP, Lisa Flavin, made the biggest insider sale in the last 12 months. That single transaction was for US$4.4m worth of shares at a price of US$89.65 each. That means that an insider was selling shares at slightly below the current price (US$94.62). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 46% of Lisa Flavin's stake.
Happily, we note that in the last year insiders paid US$2.1m for 24.40k shares. But they sold 61.22k shares for US$5.6m. Over the last year we saw more insider selling of Emerson Electric 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).
Insiders At Emerson Electric Have Bought Stock Recently
There has been significantly more insider buying, than selling, at Emerson Electric, over the last three months. Insiders spent US$2.1m on shares. But Executive VP & COO Ram Krishnan sold shares worth US$1.2m. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Emerson Electric insiders own about US$202m worth of shares (which is 0.4% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.