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Lockheed Martin Corporation's (NYSE:LMT)) market cap declines to US$102b but insiders who sold US$13m stock were able to hedge their losses

Insiders seem to have made the most of their holdings by selling US$13m worth of Lockheed Martin Corporation (NYSE:LMT) stock at an average sell price of US$433 during the past year. After the stock price dropped 6.5% last week, the company's market value declined by US$7.1b, but insiders were able to mitigate their losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Lockheed Martin

Lockheed Martin Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chief Operating Officer, Frank St. John, sold US$3.5m worth of shares at a price of US$438 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$386). So it is hard to draw any strong conclusion from it.

Over the last year we saw more insider selling of Lockheed Martin shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At Lockheed Martin Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at Lockheed Martin. In that time, insider Gregory Ulmer dumped US$2.9m worth of shares. Meanwhile insider John Donovan bought US$250k worth. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Lockheed Martin insiders own 0.06% of the company, worth about US$64m. 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 Lockheed Martin Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Lockheed Martin stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lockheed Martin. Case in point: We've spotted 3 warning signs for Lockheed Martin you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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