Yahoo Finance For Caterpillar Inc. (NYSE:CAT) insiders, selling US$3.5m worth of stock earlier this year was a smart move.
Last week, Caterpillar Inc.'s (NYSE:CAT) stock jumped 5.8%, but insiders who sold US$3.5m worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$217, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Caterpillar
The Last 12 Months Of Insider Transactions At Caterpillar
The Group President of Energy & Transportation Segment, Joseph Creed, made the biggest insider sale in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$204 each. So we know that an insider sold shares at around the present share price of US$191. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
All up, insiders sold more shares in Caterpillar than they bought, over 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!
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).
Does Caterpillar Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Caterpillar insiders own about US$186m worth of shares (which is 0.2% 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.
What Might The Insider Transactions At Caterpillar Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Caterpillar insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Caterpillar. 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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
