We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Mettler-Toledo International Inc. (NYSE:MTD).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Mettler-Toledo International
In the last twelve months, the biggest single sale by an insider was when Waldemar Rauch sold US$2.2m worth of shares at a price of US$619 per share. That means that an insider was selling shares at around the current price of US$587. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
We note that in the last year insiders divested 4.72k shares for a total of US$2.9m. Over the last year we saw more insider selling of Mettler-Toledo International shares, than buying. They sold for an average price of about US$619. It’s not particularly great to see insiders were selling shares around current prices. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. The chart below shows insider transactions over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Insiders at Mettler-Toledo International Have Sold Stock Recently
The last three months saw significant insider selling at Mettler-Toledo International. In total, Chief Financial Officer Shawn Vadala dumped US$89k worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of Mettler-Toledo International
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Mettler-Toledo International insiders own about US$346m worth of shares (which is 2.4% 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 Mettler-Toledo International Tell Us?
An insider sold stock recently, but they haven’t been buying. And there weren’t any purchases to give us comfort, over the last year. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Mettler-Toledo International.
But note: Mettler-Toledo International 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.