Yahoo Finance Possible bearish signals as Lockheed Martin Corporation (NYSE:LMT) insiders disposed of US$11m worth of stock
Over the past year, many Lockheed Martin Corporation (NYSE:LMT) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Lockheed Martin
The Last 12 Months Of Insider Transactions At Lockheed Martin
The Chief Operating Officer, Frank St. John, made the biggest insider sale in the last 12 months. That single transaction was for US$3.2m worth of shares at a price of US$474 each. That means that an insider was selling shares at below the current price (US$475). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was 100% of Frank St. John's holding.
All up, insiders sold more shares in Lockheed Martin 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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 Are Selling The Stock
We've seen more insider selling than insider buying at Lockheed Martin recently. In total, insiders sold US$8.0m worth of shares in that time. Meanwhile insider John Donovan bought US$251k worth. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.
Does Lockheed Martin Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Lockheed Martin insiders own about US$94m worth of shares. That equates to 0.08% of the company. 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?
The stark truth for Lockheed Martin is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lockheed Martin. While conducting our analysis, we found that Lockheed Martin has 2 warning signs and it would be unwise to ignore them.
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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