Insiders At FedEx Sold US$1.6m In Stock, Alluding To Potential Weakness
Many FedEx Corporation (NYSE:FDX) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for FedEx
The Last 12 Months Of Insider Transactions At FedEx
Over the last year, we can see that the biggest insider sale was by the Executive VP, Mark Allen, for US$1.5m worth of shares, at about US$297 per share. That means that even when the share price was below the current price of US$314, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 12% of Mark Allen's holding.
In the last twelve months insiders purchased 1.20k shares for US$303k. On the other hand they divested 5.47k shares, for US$1.6m. In total, FedEx 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!
I will like FedEx better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
FedEx Insiders Are Selling The Stock
The last three months saw significant insider selling at FedEx. In total, insiders dumped US$1.5m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. FedEx insiders own 8.3% of the company, currently worth about US$6.1b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About FedEx Insiders?
Insiders haven't bought FedEx stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, FedEx makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that FedEx has 2 warning signs and it would be unwise to ignore them.
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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.
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