Insiders who purchased this year lose US$24k as The Gorman-Rupp Company (NYSE:GRC) stock drops to US$24.22
The recent 9.7% drop in The Gorman-Rupp Company's (NYSE:GRC) stock could come as a blow to insiders who purchased US$285k worth of stock at an average buy price of US$26.50 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$260k, which is not what they expected.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Gorman-Rupp
The Last 12 Months Of Insider Transactions At Gorman-Rupp
The Executive Chairman of the Board Jeffrey Gorman made the biggest insider purchase in the last 12 months. That single transaction was for US$131k worth of shares at a price of US$26.29 each. That means that even when the share price was higher than US$24.22 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Gorman-Rupp insiders may have bought shares in the last year, but they didn't sell any. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does Gorman-Rupp Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 8.1% of Gorman-Rupp shares, worth about US$51m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Gorman-Rupp Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Gorman-Rupp shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Gorman-Rupp insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Gorman-Rupp. When we did our research, we found 4 warning signs for Gorman-Rupp (2 don't sit too well with us!) that we believe deserve your full attention.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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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.
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