Trade Alert: The Executive Chairman of the Board Of The Gorman-Rupp Company (NYSE:GRC), Jeffrey Gorman, Has Just Spent US$131k Buying A Few More Shares

Investors who take an interest in The Gorman-Rupp Company (NYSE:GRC) should definitely note that the Executive Chairman of the Board, Jeffrey Gorman, recently paid US$26.29 per share to buy US$131k worth of the stock. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

View our latest analysis for Gorman-Rupp

Gorman-Rupp Insider Transactions Over The Last Year

Notably, that recent purchase by Jeffrey Gorman is the biggest insider purchase of Gorman-Rupp shares that we've seen in the last year. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$25.93). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Jeffrey Gorman was the only individual insider to buy shares in the last twelve months.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Gorman-Rupp is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Gorman-Rupp insiders own 7.8% of the company, worth about US$53m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Gorman-Rupp Tell Us?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in Gorman-Rupp shares, given these transactions (along with notable insider ownership of the company). While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To that end, you should learn about the 5 warning signs we've spotted with Gorman-Rupp (including 2 which are a bit unpleasant).

Of course Gorman-Rupp may not be the best stock to buy. So you may wish to see this free collection of high quality 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, but not derivative transactions.

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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.

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