Eric Pachapa, chief accounting officer and controller of AAR Corp.(AIR 0.81%), executed an open-market sale of 5,000 shares on Aug. 4, 2025, valued at approximately $364,600, reducing his direct ownership of the company to 20,385 shares.
Transaction summary
| Metric | Value |
|---|---|
| Shares traded | 5,000 |
| Transaction value | $364,581.50 |
| Post-transaction shares | 20,385 |
| Post-transaction value | $1.5 million |
| 1-year performance | 28.86% |
Transaction and post-transaction values based on Aug. 4 market close price of $72.92.
Key questions
How does this transaction compare to Pachapa's historical trading activity?
This transaction is consistent with a recent trend of smaller, more frequent sales, and there have been four trades in the last 30 days, indicating sustained but moderating disposition activity.
What is the significance of the remaining ownership after this sale?
Post-sale, Pachapa retains 20,385 shares, representing approximately 0.06% of shares outstanding (based on the latest available data), with an estimated market value of $1.5 million as of the Aug. 4 close.
How does market performance contextualize the timing of this sale?
The sale occurred after a period of notable appreciation in the stock's value, with a one-year total return of 28.86%. Shares were priced at $72.92 at the time of the transaction.
What patterns emerge in Pachapa's recent insider activity?
His activity shows a declining pattern in trade size and net shares sold -- natural as he has significantly reduced his stake in the company, giving him fewer shares at his disposal to sell. His median trade size decreased from 12,525 shares a couple of years ago to 5,235 shares more recently. Transaction frequency has remained relatively steady, averaging a 59-day gap, and most of his recent trades were clustered in the summer months, suggesting a disciplined, periodic approach to liquidity events.
Company overview
| Metric | Value |
|---|---|
| Market capitalization | $2.60 billion |
| Revenue (TTM) | $2.78 billion |
| Net income (TTM) | $12.50 million |
| One-year price change | 28.86% |
Company snapshot
- Provides aftermarket aviation support, maintenance, repair and overhaul (MRO), inventory management, and expeditionary logistics products and services.
- Generates revenue through service contracts, parts sales, leasing, and performance-based logistics programs for both commercial and government clients.
- Serves commercial airlines, cargo operators, regional carriers, OEMs, leasing companies, and military/government agencies worldwide.
AAR operates at scale in the aerospace and defense sector, leveraging integrated aviation services and supply chain solutions to support both commercial and government aviation markets. The company's strategy centers on providing comprehensive aftermarket support and mission-critical logistics, differentiating itself through reliability and breadth of service offerings. Its established presence and diverse customer base underpin its competitive position in the global aviation services industry.
Foolish take
It's not a good idea to get too perturbed over an executive selling stock. After all, executives, just like retail investors, often have personal and financial motivations for selling shares that may not reflect their views of the company. However, it's still a good idea to keep an eye on what insiders are doing with their stock holdings.
Pachapa, AAR's chief accounting officer and controller, sold this batch of shares after the company's fourth-quarter earnings release somewhat disappointed the market, as revenue fell short of expectations. AAR offers parts supply to the commercial aerospace and defense markets on long-term supply agreements, and maintenance, repair and engineering services, as well as aviation maintenance software solutions.
As such, it's a play on the growth in flight departures and the increasing outsourcing of parts supply and maintenance to companies like AAR. In a world where supply chains are increasingly complex -- and where they have faced severe challenges over the last few years -- it makes sense for airlines and commercial aviation companies to outsource, and AAR has been a beneficiary of that trend.
Indeed, although the company's recent results came up short of expectations in terms of revenue, it did grow sales by 15% year over year and adjusted earnings before interest, taxation, depreciation, and amortization by 19%.
As such, unless the commercial aerospace market is about to slow down, Pachapa's stock sale does not appear to presage any bad news for AAR.
Glossary
Open-market sale: A transaction where shares are sold on a public stock exchange, not through private arrangements.
Insider activity: Buying or selling of a company's stock by its executives, directors, or significant shareholders.
Disposition activity: The process of selling or otherwise disposing of owned shares or assets.
Direct ownership: Shares held personally by an individual, not through trusts or indirect means.
Outstanding shares: The total number of a company's shares currently held by all shareholders.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
Aftermarket aviation support: Services provided for aircraft after their initial sale, including maintenance and parts supply.
Maintenance, repair and overhaul (MRO): Services that keep aircraft operational and safe, including inspections, repairs, and upgrades.
Expeditionary logistics: Rapid deployment of supplies and support to remote or temporary locations, often for military or emergency uses.
OEM: Original equipment manufacturer; a company that makes parts or equipment that may be marketed by another manufacturer.
Performance-based logistics: Service contracts where payment depends on meeting specific performance outcomes, often used in defense and aviation.
TTM: The 12-month period ending with the most recent quarterly report.
