General Electric Company’s (NYSE: GE) recent drop in market capitalization of US $ 8.4 billion means loss of US $ 7.1,000 for insiders who bought this year
The recent 7.1% drop in General Electricity Company Stocks (NYSE: GE) could be a blow to insiders who bought US $ 170,000 worth of shares at an average purchase price of US $ 104 over the past 12 months. Insiders buy in the hope that their investments will increase in value over time. However, due to recent losses, their initial investment is now only worth US $ 162,000, which is not huge.
While we never suggest that investors should base their decisions solely on what a company’s directors have done, we think it makes perfect sense to keep tabs on what insiders are doing.
Check out our latest review for General Electric
The last 12 months of insider trading at General Electric
In fact, the recent purchase by Paula G. Reynolds was the largest purchase of General Electric shares by an insider in the past twelve months, according to our records. This means that even when the stock price was above US $ 99.96 (the recent price), an insider wanted to buy stocks. It is very possible that they regret the purchase, but it is more likely that they are optimistic about the business. We always take careful note of the price insiders pay when they buy stocks. It is encouraging to see an insider paid above the current price of the shares, as it suggests they have seen value, even at higher levels. Paula G. Reynolds was the only initiate to buy in the past year.
Paula G. Reynolds purchased a total of 1.63,000 shares during the year at an average price of US $ 104. Below you can see a visual representation of insider trading (by businesses and individuals) over the past 12 months. If you click on the chart you can see all of the individual trades including the stock price, individual and date!
General Electric is not the only one to buy. So take a look at this free list of growing companies with insider buying.
Another way to test the alignment between a company’s executives 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 have an incentive to build the business for the long term. It’s great to see General Electric insiders own 0.2% of the company, worth around $ 267 million. I like to see this level of insider ownership because it increases the chances that management is thinking in the best interests of shareholders.
What could insider trading at General Electric tell us?
It’s certainly positive to see the recent insider buy. And longer-term insider trading gives us confidence as well. Once you factor in the high number of insider owners, it sure looks like insiders are positive about General Electric. One for the watchlist, at least! So these insider trading can help us build a stock thesis, but it’s also worth knowing the risks this business faces. At Simply Wall St, we have found that General Electric has 3 warning signs (1 is significant!) That deserve your attention before going any further in your analysis.
If you would rather consult with another company – one with potentially superior finances – then don’t miss this free list of interesting companies, which have a HIGH return on equity and low leverage.
For the purposes of this article, insiders are the persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St does not have any position in the mentioned stocks.
Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.