Arrow Electronics Insiders Sell US$1.4m Of Stock, Possibly Signalling Caution

Many Arrow Electronics, Inc. (NYSE:ARW) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Arrow Electronics

In the last twelve months, the biggest single purchase by an insider was when insider Sean Kerins bought US$992k worth of shares at a price of US$115 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$108). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Over the last year, we can see that insiders have bought 10.53k shares worth US$1.2m. But they sold 11.42k shares for US$1.4m. All up, insiders sold more shares in Arrow Electronics than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Arrow Electronics

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Insider Ownership Of Arrow Electronics

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 0.7% of Arrow Electronics shares, worth about US$37m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Arrow Electronics Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at Arrow Electronics in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Arrow Electronics. In terms of investment risks, we've identified 1 warning sign with Arrow Electronics and understanding this should be part of your investment process.

But note: Arrow Electronics 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.