Those following along with General Electric Company (NYSE:GE) will no doubt be intrigued by the recent purchase of shares by H. Culp, Chairman & CEO of the company, who spent a stonking US$4.8m on stock at an average price of US$74.53. There’s no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 3.4%.
View our latest analysis for General Electric
General Electric Insider Transactions Over The Last Year
In fact, the recent purchase by H. Culp was the biggest purchase of General Electric shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of US$77.66 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it’s a good sign on balance, but keep in mind they may no longer see value. The good news for General Electric share holders is that insiders were buying at near the current price.
In the last twelve months General Electric insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
General Electric is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of General Electric
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. A high insider ownership often makes company leadership more mindful of shareholder interests. General Electric insiders own about US$200m worth of shares (which is 0.2% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About General Electric Insiders?
It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about General Electric. One for the watchlist, at least! 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. In terms of investment risks, we’ve identified 1 warning sign with General Electric and understanding it should be part of your investment process.
Of course General Electric 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.
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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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