Some Leidos Holdings, Inc. (NYSE:LDOS) shareholders may be a little concerned to see that the Independent Director, David Fubini, recently sold a substantial US$1.0m worth of stock at a price of US$128 per share. That's a big disposal, and it decreased their holding size by 35%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At Leidos Holdings
Notably, that recent sale by David Fubini is the biggest insider sale of Leidos Holdings shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$128, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 35% of David Fubini's stake.
Happily, we note that in the last year insiders paid US$996k for 12.63k shares. But insiders sold 17.24k shares worth US$2.0m. In total, Leidos Holdings insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Leidos Holdings insiders own about US$132m worth of shares (which is 0.8% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Leidos Holdings Insiders?
An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Leidos Holdings. At Simply Wall St, we found 4 warning signs for Leidos Holdings that deserve your attention before buying any shares.
But note: Leidos Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.