We'd be surprised if First Merchants Corporation (NASDAQ:FRME) shareholders haven't noticed that the CEO & Director, Mark Hardwick, recently sold US$476k worth of stock at US$40.22 per share. However, the silver lining is that the sale only reduced their total holding by 8.2%, so we're hesitant to read anything much into it, on its own.

First Merchants Insider Transactions Over The Last Year

In fact, the recent sale by Mark Hardwick was the biggest sale of First Merchants shares made by an insider individual in the last twelve months, according to our records. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$35.71. So it is hard to draw any strong conclusion from it.

Over the last year, we can see that insiders have bought 1.42k shares worth US$51k. On the other hand they divested 34.93k shares, for US$1.3m. In total, First Merchants insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership Of First Merchants

For a common shareholder, it is worth checking how many shares are held by company insiders. 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 First Merchants insiders own 1.5% of the company, worth about US$30m. 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 First Merchants Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. 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. In terms of investment risks, we've identified 1 warning sign with First Merchants and understanding it should be part of your investment process.

Of course First Merchants 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 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.