Last year, many Transcat, Inc. (NASDAQ:TRNS) insiders have sold a significant stake in the company, which may have piqued investor interest. When analyzing insider transactions, it is usually more valuable to know if insiders are buying than if they are selling, as the latter sends a more ambiguous message. However, shareholders should take a closer look if multiple insiders sell shares over a period of time.

While we would never recommend that investors base their decisions solely on the behavior of company leaders, logic dictates that you should also pay attention to whether insiders are buying or selling shares.

Check out our latest analysis for Transcat

The last 12 months of insider transactions at Transcat

Over the last year, we’ve seen that the largest insider sale was by President Lee Rudow, who sold $1.6 million worth of stock at around $135 per share. That means an insider sold shares at the current price of around $127. While insider selling is a negative, we find it even more negative when shares are sold at a lower price. Given that the sale occurred at around current prices, that makes us a little cautious, but it’s hardly a cause for concern.

Overall, Transcat insiders have sold more than they have bought in the last year. You can see the insider transactions (by company and individual) over the last year in the graph below. If you want to know exactly who sold, for how much and when, just click on the graph below!

I’ll like Transcat better if I see some big insider buying. While we wait, check out this free List of undervalued stocks and small cap stocks with significant recent insider buying.

Insiders at Transcat recently sold shares

Over the last three months, we have observed significant insider selling at Transcat. In total, independent director Charles Hadeed has sold $177,000 worth of shares during that time, and we have seen no purchases. Overall, this makes us somewhat cautious, but it is not the be-all and end-all.

Does Transcat have a high level of insider ownership?

Another way to test alignment between a company’s executives and other shareholders is to look at how many shares they own. We typically like to see relatively high levels of insider ownership. Insiders own 2.9% of Transcat’s shares, worth about $34 million. We’ve certainly seen higher levels of insider ownership elsewhere, but these levels are enough to indicate alignment between insiders and the other shareholders.

So what do Transcat’s insider transactions mean?

An insider has recently sold shares, but he hasn’t been buying. And our longer-term analysis of insider transactions hasn’t inspired confidence either. But it’s good to see Transcat growing its earnings. Insiders own shares, but we’re still pretty cautious given the selling history. We’d exercise some caution before buying! In addition to knowing about ongoing insider transactions, it’s useful to identify the risks Transcat faces. In terms of investment risks: We have identified 2 warning signs with Transcat and understanding them should be part of your investment process.

But please note: Transcat may not be the best stock to buySo take a look at the free List of interesting companies with high return on equity and low debt.

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.