Dorman Products Shares Plunged: What You Need to Know (DORM)

Dorman Products Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of auto parts dealer Dorman Products (Nasdaq: DORM ) fell 10% today on news of insider sales.

So what: CEO Richard Berman and his brother -- president and director Steve Berman -- will sell up to 250,000 shares each. CFO Mathias Barton will also sell 25,000 shares, so insiders aren't giving the market a good signal today.

Now what: Insiders selling can be a bad signal for the future performance of a stock, and when everyone is running for the hills I get a little worried. Both Bermans are selling a big portion of their shares, so they must not think the company can keep crushing estimates like it has for the last year. At the risk of going along with a panic sell, I don't see this as a good sign for investors.

Interested in more info on Dorman Products? Add it to your watchlist.

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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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