Trade Alert: Executive VP Of McGrath RentCorp Keith Pratt Has Sold Stock

We wouldn't blame McGrath RentCorp (NASDAQ:MGRC) shareholders if they were a little worried about the fact that Keith Pratt, the Executive VP recently netted about US$2.5m selling shares at an average price of US$127. That's a big disposal, and it decreased their holding size by 41%, which is notable but not too bad.

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McGrath RentCorp Insider Transactions Over The Last Year

In fact, the recent sale by Keith Pratt was the biggest sale of McGrath RentCorp shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of US$125. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Insiders in McGrath RentCorp didn't buy any shares in the last year. 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, simply click on the graph below!

Check out our latest analysis for McGrath RentCorp

I will like McGrath RentCorp better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that McGrath RentCorp insiders own 1.1% of the company, worth about US$34m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The McGrath RentCorp Insider Transactions Indicate?

Insiders haven't bought McGrath RentCorp stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that McGrath RentCorp is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for McGrath RentCorp and we suggest you have a look.

But note: McGrath RentCorp 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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