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The fact that multiple W.W. Grainger, Inc. (NYSE:GWW) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
W.W. Grainger Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the CFO & Senior VP, Deidra Merriwether, for US$1.2m worth of shares, at about US$1,007 per share. That means that an insider was selling shares at slightly below the current price (US$1,085). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 13% of Deidra Merriwether's holding.
Insiders in W.W. Grainger didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
View our latest analysis for W.W. Grainger
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Insiders At W.W. Grainger Have Sold Stock Recently
The last quarter saw substantial insider selling of W.W. Grainger shares. In total, insiders sold US$2.3m 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 W.W. Grainger
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. W.W. Grainger insiders own 9.5% of the company, currently worth about US$4.9b 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.