Materion Corporation's (NYSE:MTRN) stock price has dropped 6.4% in the previous week, but insiders who sold US$376k in stock over the past year have had less luck. Given that the average selling price of US$80.00 is still lower than the current share price, insiders would probably have been better off keeping their shares.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Materion
The Last 12 Months Of Insider Transactions At Materion
The VP, General Counsel & Secretary, Gregory Chemnitz, made the biggest insider sale in the last 12 months. That single transaction was for US$376k worth of shares at a price of US$80.00 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$90.36. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 17% of Gregory Chemnitz's holding. The only individual insider seller over the last year was Gregory Chemnitz.
The chart below shows insider transactions (by companies and individuals) over the last year. 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 Materion
For a common shareholder, it is worth checking how many shares are held by company 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. It appears that Materion insiders own 0.8% of the company, worth about US$15m. 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 Materion Insider Transactions Indicate?
The fact that there have been no Materion insider transactions recently certainly doesn't bother us. Our analysis of Materion insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. 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. When we did our research, we found 2 warning signs for Materion (1 shouldn't be ignored!) that we believe deserve your full attention.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.