The fact that multiple Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. 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.
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.
The Last 12 Months Of Insider Transactions At Kratos Defense & Security Solutions
In the last twelve months, the biggest single sale by an insider was when the President of Microwave Electronics Division, Yonah Adelman, sold US$1.1m worth of shares at a price of US$16.50 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$18.49. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 50% of Yonah Adelman's stake.
Insiders in Kratos Defense & Security Solutions didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Kratos Defense & Security Solutions 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. Kratos Defense & Security Solutions insiders own about US$76m worth of shares. That equates to 2.8% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Kratos Defense & Security Solutions Insider Transactions Indicate?
The fact that there have been no Kratos Defense & Security Solutions insider transactions recently certainly doesn't bother us. Our analysis of Kratos Defense & Security Solutions insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Kratos Defense & Security Solutions has 1 warning sign we think you should be aware of.
Of course Kratos Defense & Security Solutions 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.