Some Otter Tail Corporation (NASDAQ:OTTR) shareholders may be a little concerned to see that the Independent Director, John Erickson, recently sold a substantial US$632k worth of stock at a price of US$66.52 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 6.0%.
The Last 12 Months Of Insider Transactions At Otter Tail
Notably, that recent sale by John Erickson is the biggest insider sale of Otter Tail shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of US$69.10. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 6.0% of John Erickson's holding.
The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. Otter Tail insiders own about US$53m worth of shares. That equates to 1.8% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Otter Tail Insiders?
An insider sold Otter Tail shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since Otter Tail is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 2 warning signs for Otter Tail you should know about.
Of course Otter Tail 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.
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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