Yahoo Finance Lockheed Martin Corporation (NYSE:LMT) insiders sold US$13m worth of stock, a possible red flag that's yet to materialize
While Lockheed Martin Corporation (NYSE:LMT) shareholders have had a good week with the stock up 3.2%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell US$13m worth of stock in the past 12 months. This could be a sign of impending weakness.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Lockheed Martin
The Last 12 Months Of Insider Transactions At Lockheed Martin
Over the last year, we can see that the biggest insider sale was by the Chief Operating Officer, Frank St. John, for US$3.5m worth of shares, at about US$438 per share. That means that even when the share price was below the current price of US$481, 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. It is worth noting that this sale was 100% of Frank St. John's holding.
In total, Lockheed Martin insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Lockheed Martin Insiders Bought Stock Recently
It's good to see that Lockheed Martin insiders have made notable investments in the company's shares. We can see that insider John Donovan paid US$251k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.
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. 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 Lockheed Martin insiders own 0.07% of the company, worth about US$84m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Lockheed Martin Tell Us?
It's certainly positive to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. The more recent transactions are a positive, but Lockheed Martin insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. In short they are likely aligned with shareholders. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lockheed Martin. Every company has risks, and we've spotted 1 warning sign for Lockheed Martin you should know about.
Of course Lockheed Martin 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, but not derivative transactions.
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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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