In the last year, many Marathon Petroleum Corporation (NYSE:MPC) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Marathon Petroleum
In fact, the recent sale by Timothy Aydt was the biggest sale of Marathon Petroleum shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at below the current price (US$173). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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. It is worth noting that this sale was only 39% of Timothy Aydt's holding.
Insiders in Marathon Petroleum 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. 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.
Marathon Petroleum Insiders Are Selling The Stock
The last three months saw significant insider selling at Marathon Petroleum. In total, Executive Vice President of Refining Timothy Aydt dumped US$1.4m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership Of Marathon Petroleum
Another way to test the alignment between the leaders of a company 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 be incentivised to build the company for the long term. Insiders own 0.2% of Marathon Petroleum shares, worth about US$97m. 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 Do The Marathon Petroleum Insider Transactions Indicate?
An insider sold Marathon Petroleum shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Marathon Petroleum. To that end, you should learn about the 3 warning signs we've spotted with Marathon Petroleum (including 1 which shouldn't be ignored).
Of course Marathon Petroleum 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 of direct interests only, but not derivative transactions or indirect interests.
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