We wouldn't blame Genuine Parts Company (NYSE:GPC) shareholders if they were a little worried about the fact that Wendy Needham, the Independent Director recently netted about US$503k selling shares at an average price of US$155. That's a big disposal, and it decreased their holding size by 18%, which is notable but not too bad.

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The Last 12 Months Of Insider Transactions At Genuine Parts

Notably, that recent sale by Wendy Needham is the biggest insider sale of Genuine Parts shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$155, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 18% of Wendy Needham's holding.

Happily, we note that in the last year insiders paid US$378k for 2.50k shares. But they sold 3.25k shares for US$503k. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

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. Insiders own 0.2% of Genuine Parts shares, worth about US$52m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Genuine Parts Insider Transactions Indicate?

An insider hasn't bought Genuine Parts stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Genuine Parts is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Genuine Parts. In terms of investment risks, we've identified 1 warning sign with Genuine Parts and understanding this should be part of your investment process.

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.

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.