We wouldn't blame Lear Corporation (NYSE:LEA) shareholders if they were a little worried about the fact that Raymond Scott, the President recently netted about US$6.8m selling shares at an average price of US$135. Probably the most concerning element of the whole transaction is that the disposal amounted to 50% of their entire holding.
The Last 12 Months Of Insider Transactions At Lear
In fact, the recent sale by Raymond Scott was the biggest sale of Lear shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of US$137. 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.
Insiders in Lear didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Check out our latest analysis for Lear
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Lear insiders own about US$37m worth of shares. That equates to 0.5% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Lear Tell Us?
Insiders sold Lear shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. On the plus side, Lear makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lear. In terms of investment risks, we've identified 3 warning signs with Lear and understanding these should be part of your investment process.
But note: Lear may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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 of direct interests only, but not derivative transactions or indirect interests.
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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.