Yahoo Finance Possible Bearish Signals With Delta Air Lines Insiders Disposing Stock
Over the past year, many Delta Air Lines, Inc. (NYSE:DAL) insiders sold a significant stake in the company which may have piqued investors' interest. 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 Delta Air Lines
The Last 12 Months Of Insider Transactions At Delta Air Lines
Over the last year, we can see that the biggest insider sale was by the President, Glen Hauenstein, for US$4.9m worth of shares, at about US$49.05 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$50.50. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 31% of Glen Hauenstein's holding.
Happily, we note that in the last year insiders paid US$1.1m for 30.00k shares. On the other hand they divested 258.69k shares, for US$12m. All up, insiders sold more shares in Delta Air Lines than they bought, over the last year. They sold for an average price of about US$47.59. It's not particularly great to see insiders were selling shares at below recent prices. But we wouldn't put too much weight on the insider selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Delta Air Lines 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.
Delta Air Lines Insiders Are Selling The Stock
We've seen more insider selling than insider buying at Delta Air Lines recently. In that time, insiders dumped US$9.6m worth of shares. Meanwhile insider Wilfred Chiang bought US$495k worth. Generally this level of net selling might be considered a bit bearish.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Delta Air Lines insiders own 0.4% of the company, currently worth about US$122m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Delta Air Lines Insiders?
The insider sales have outweighed the insider buying, at Delta Air Lines, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since Delta Air Lines is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 2 warning signs with Delta Air Lines and understanding them should be part of your investment process.
Of course Delta Air Lines 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 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.
