Viewing insider transactions for The Goodyear Tire & Rubber Company’s (NASDAQ:GT ) over the last year, we see that insiders were net buyers. This means that a larger number of shares were purchased by insiders in relation to shares sold.
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.
In the last twelve months, the biggest single purchase by an insider was when insider Jason Winkler bought US$755k worth of shares at a price of US$7.55 per share. We do like to see buying, but this purchase was made at well below the current price of US$8.92. Because it occurred at a lower valuation, it doesn’t tell us much about whether insiders might find today’s price attractive.
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!
View our latest analysis for Goodyear Tire & Rubber
Goodyear Tire & Rubber is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Many investors like to check how much of a company is owned by 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. Goodyear Tire & Rubber insiders own about US$110m worth of shares (which is 4.3% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Goodyear Tire & Rubber insiders are well aligned, and quite possibly think the share price is too low. That’s what I like to see! While it’s good to be aware of what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that Goodyear Tire & Rubber has 1 warning sign and it would be unwise to ignore this.
But note: Goodyear Tire & Rubber may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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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.