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Franklin Electric Insiders Sold US$4.2m Of Shares Suggesting Hesitancy

Simply Wall St ·  11/20/2023 20:48

In the last year, many Franklin Electric Co., Inc. (NASDAQ:FELE) insiders sold a substantial stake in the company which may have sparked shareholders' attention. 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.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Franklin Electric

Franklin Electric Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chairman & CEO, Gregg Sengstack, sold US$1.2m worth of shares at a price of US$98.54 per share. So we know that an insider sold shares at around the present share price of US$89.88. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Franklin Electric insiders didn't buy any shares 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!

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NasdaqGS:FELE Insider Trading Volume November 20th 2023

I will like Franklin Electric better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Franklin Electric Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Franklin Electric shares. In total, VP & President of Headwater Companies DeLancey Davis dumped US$149k 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.

Does Franklin Electric Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Franklin Electric insiders own 14% of the company, worth about US$588m. 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 Franklin Electric Insiders?

An insider hasn't bought Franklin Electric stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since Franklin Electric 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. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course Franklin Electric 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.

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