Marathon Petroleum Insiders Sell US$1.7m Of Stock, Possibly Signalling Caution

In the last year, many Marathon Petroleum Corporation (NYSE:MPC) insiders sold a substantial stake in the company which may have sparked shareholders' attention. 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, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Marathon Petroleum

The Last 12 Months Of Insider Transactions At Marathon Petroleum

In the last twelve months, the biggest single sale by an insider was when the Executive Vice President of Refining, Timothy Aydt, sold US$1.4m worth of shares at a price of US$173 per share. That means that even when the share price was below the current price of US$183, 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 39% of Timothy Aydt's holding.

Insiders in Marathon Petroleum didn't buy any shares in the last year. 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!

I will like Marathon Petroleum better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Marathon Petroleum Insiders Are Selling The Stock

The last three months saw significant insider selling at Marathon Petroleum. Specifically, Executive Vice President of Refining Timothy Aydt ditched US$1.4m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Marathon Petroleum insiders own 0.2% of the company, currently worth about US$116m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Marathon Petroleum Insider Transactions Indicate?

An insider hasn't bought Marathon Petroleum stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. Be aware that Marathon Petroleum is showing 4 warning signs in our investment analysis, and 1 of those is concerning...

But note: Marathon Petroleum 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.