Some Fabrinet (NYSE:FN) shareholders may be a little concerned to see that the Lead Independent Director, Rollance Olson, recently sold a substantial US$2.1m worth of stock at a price of US$206 per share. That's a big disposal, and it decreased their holding size by 29%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At Fabrinet
In the last twelve months, the biggest single sale by an insider was when the CEO & Director, Seamus Grady, sold US$4.3m worth of shares at a price of US$160 per share. That means that an insider was selling shares at slightly below the current price (US$197). 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. 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. This single sale was 79% of Seamus Grady's stake.
Fabrinet 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. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does Fabrinet Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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 Fabrinet insiders own 0.4% of the company, worth about US$29m. 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 Fabrinet Insider Transactions Indicate?
Insiders sold Fabrinet 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 Fabrinet is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Fabrinet has 1 warning sign we think you should be aware of.
Of course Fabrinet 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.