Looking at Universal Technical Institute, Inc.'s (NYSE:UTI ) insider transactions over the last year, we can see that insiders were net sellers. That is, there were more number of shares sold by insiders than there were purchased.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Universal Technical Institute
In the last twelve months, the biggest single sale by an insider was when the Independent Director, Loretta Sanchez, sold US$131k worth of shares at a price of US$15.07 per share. That means that an insider was selling shares at around the current price of US$14.27. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. The only individual insider seller over the last year was Loretta Sanchez.
Loretta Sanchez sold a total of 16.32k shares over the year at an average price of US$12.02. 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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Universal Technical Institute Insiders Are Selling The Stock
The last three months saw significant insider selling at Universal Technical Institute. In total, Independent Director Loretta Sanchez sold US$131k 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
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. Universal Technical Institute insiders own about US$22m worth of shares. That equates to 2.8% of the company. 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 Does This Data Suggest About Universal Technical Institute Insiders?
An insider sold Universal Technical Institute shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Universal Technical Institute is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. 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. For example, Universal Technical Institute has 2 warning signs (and 1 which can't be ignored) we think you should know about.
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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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