The fact that multiple Science Applications International Corporation (NYSE:SAIC) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. 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 Science Applications International
Science Applications International Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the President of Defense & Civilian Sector, Robert Genter, sold US$1.0m worth of shares at a price of US$107 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$115. 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. 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 only 14% of Robert Genter's holding.
In the last year Science Applications International insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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.
Science Applications International Insiders Are Selling The Stock
The last three months saw significant insider selling at Science Applications International. In total, insiders sold US$778k 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.
Insider Ownership Of Science Applications International
For a common shareholder, it is worth checking how many shares are held by company insiders. 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 Science Applications International insiders own 1.0% of the company, worth about US$61m. 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 Science Applications International Insider Transactions Indicate?
Insiders sold Science Applications International shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But it is good to see that Science Applications International is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Science Applications International. To that end, you should learn about the 3 warning signs we've spotted with Science Applications International (including 1 which doesn't sit too well with us).
Of course Science Applications International 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.