Insiders At Eaton Sold US$6.5m In Stock, Alluding To Potential Weakness

Eaton Corp. Plc +0.91% Post

Eaton Corp. Plc

ETN

333.25

333.25

+0.91%

0.00% Post

Many Eaton Corporation plc (NYSE:ETN) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Eaton

The Last 12 Months Of Insider Transactions At Eaton

In the last twelve months, the biggest single sale by an insider was when the President & COO of Electrical Sector, Heath Monesmith, sold US$2.2m worth of shares at a price of US$221 per share. That means that even when the share price was below the current price of US$313, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 14% of Heath Monesmith's stake.

Insiders in Eaton 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NYSE:ETN Insider Trading Volume March 29th 2024

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders At Eaton Have Sold Stock Recently

The last three months saw significant insider selling at Eaton. In total, insiders dumped US$3.3m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of Eaton

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Eaton insiders own 0.2% of the company, currently worth about US$306m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Eaton Insiders?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Eaton is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. Case in point: We've spotted 1 warning sign for Eaton you should be aware of.

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 of direct interests only, but not derivative transactions or indirect interests.

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