Insider Sell: AAR Corp's Chairman, President & CEO Holmes John McClain III Sells 72,637 Shares
On October 2, 2023, Holmes John McClain III, the Chairman, President & CEO of AAR Corp (NYSE:AIR), sold 72,637 shares of the company. This move is part of a larger trend for the insider, who over the past year, has sold a total of 320,560 shares and purchased none.
Holmes John McClain III has been with AAR Corp for several years, leading the company through various market conditions. AAR Corp is a global aftermarket solutions company with operations in over 100 countries. The company provides aviation services to commercial and government customers worldwide. These services include maintenance, repair, and overhaul (MRO) as well as supply chain solutions.
The insider's recent sell has raised some eyebrows in the investment community. Over the past year, there have been no insider buys at AAR Corp, while there have been 25 insider sells. This trend is illustrated in the following image:
On the day of the insider's recent sell, shares of AAR Corp were trading for $60.32 apiece, giving the stock a market cap of $2.055 billion. The price-earnings ratio was 30.65, lower than the industry median of 32.84 but higher than the companys historical median price-earnings ratio.
According to GuruFocus Value, which is an intrinsic value estimate developed by GuruFocus, AAR Corp is modestly overvalued. The stock's price-to-GF-Value ratio is 1.15, with a GF Value of $52.42 and a current price of $60.32. The GF Value is calculated based on historical multiples, a GuruFocus adjustment factor, and future estimates of business performance from Morningstar analysts. The GF Value image below provides a visual representation of this analysis:
The insider's sell, coupled with the stock's modest overvaluation, may suggest that the insider believes the stock's current price does not reflect its intrinsic value. However, it's important to note that insider sells can be influenced by a variety of factors, including personal financial needs or portfolio diversification strategies. Therefore, while the insider's sell is a piece of the puzzle, it should not be the sole factor in an investment decision.
Investors should continue to monitor insider activity at AAR Corp and consider other key factors such as the company's financial health, market position, and industry trends when making investment decisions.
This article first appeared on GuruFocus.
