Many Eaton Corporation plc (NYSE:ETN) insiders have been dumping their shares over the past year, which may be of interest to the company’s shareholders. Knowing if insiders are buying is usually more helpful in evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate further.

While we would never suggest that investors should base their decisions solely on the activities of a company’s management, we think it is perfectly logical to keep an eye on the activities of insiders.

Check out our latest analysis for Eaton

The last 12 months of insider transactions at Eaton

Executive VP & CFO, Olivier Leonetti, made the largest insider sale of the last 12 months. This single transaction was for $1.2 million worth of shares at a price of $272 each. This means that an insider sold shares at a price slightly below the current price ($292). We generally view it as a negative when insiders have been selling, particularly when they did so below the current price, as it implies they thought a lower price was appropriate. While insider selling is not a positive sign, we cannot be sure if it means insiders think the shares are fully valued, so it is only a weak sign. We note that the largest single sale was for 88% of Olivier Leonetti’s shares.

Over the last year, Eaton insiders have not purchased any shares of the company. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much and when, just click on the chart below!

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Insider ownership

Looking at a company’s total insider share holdings can help you assess whether they are well aligned with common shareholders. We typically like to see a relatively high level of insider ownership. Eaton insiders own about $285 million worth of shares (that’s 0.2% of the company). Most shareholders would be happy to see this level of insider ownership, as it suggests that management’s incentives are well aligned with those of other shareholders.

What could Eaton’s insider transactions tell us?

There have been no insider transactions in the last three months – that doesn’t mean much. While it’s nice to see a high percentage of insider ownership, if we look back at the last year, Eaton’s insider sales are not exactly encouraging. Of course The future is the most important thingSo if you are interested in Eaton, you should check it out here free Report on analyst forecasts for the company.

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For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulator. Currently, we only consider open market transactions and private disposals of direct holdings, but not derivative transactions or indirect holdings.

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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.