Over the past year, many McGrath RentCorp (NASDAQ:MGRC) insiders sold a significant stake in the company which may have piqued investors’ interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for McGrath RentCorp
McGrath RentCorp Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Senior VP & Division Manager of Mobile Modular, Philip Hawkins, sold US$906k worth of shares at a price of US$83.42 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$98.31. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don’t know for sure what they think of the stock price. This single sale was just 38% of Philip Hawkins’s stake.
Insiders in McGrath RentCorp didn’t buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insider Ownership Of McGrath RentCorp
Many investors like to check how much of a company is owned by 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. Insiders own 1.5% of McGrath RentCorp shares, worth about US$36m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The McGrath RentCorp Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded McGrath RentCorp shares in the last quarter. Our analysis of McGrath RentCorp insider transactions leaves us cautious. But it’s good to see that insiders own shares in the company. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. You’d be interested to know, that we found 1 warning sign for McGrath RentCorp and we suggest you have a look.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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, 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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