Don’t Ignore The Fact That This Insider Just Sold Some Shares In Thermo Fisher Scientific Inc. (NYSE:TMO)

Some Thermo Fisher Scientific Inc. (NYSE:TMO) shareholders may be a little concerned to see that the Non-Executive Chairman of the Board, Jim Manzi, recently sold a whopping US$500k worth of stock at a price of US$273 per share. However, that sale only accounted for 6.3% of their holding, so arguably it doesn’t say much about their conviction.

See our latest analysis for Thermo Fisher Scientific

The Last 12 Months Of Insider Transactions At Thermo Fisher Scientific

The Senior VP & President of Customer Channels, Gregory Herrema, made the biggest insider sale in the last 12 months. That single transaction was for US$1.8m worth of shares at a price of US$247 each. That means that an insider was selling shares at slightly below the current price (US$278). 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. It is worth noting that this sale was only 25.9% of Gregory Herrema’s holding.

Over the last year, we note insiders sold 19972 shares worth US$5.0m. Insiders in Thermo Fisher Scientific didn’t buy any shares in the last year. You can see a visual depiction of insider transactions (by 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!

NYSE:TMO Recent Insider Trading, August 22nd 2019
NYSE:TMO Recent Insider Trading, August 22nd 2019

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. Thermo Fisher Scientific insiders own 0.2% of the company, currently worth about US$229m based on the recent share price. 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 Thermo Fisher Scientific Insiders?

Insiders sold Thermo Fisher Scientific shares recently, but they didn’t buy any. And even if we look to the last year, we didn’t see any purchases. On the plus side, Thermo Fisher Scientific makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in Thermo Fisher Scientific, you should check out this free report on analyst forecasts for the company.

But note: Thermo Fisher Scientific 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, but not derivative transactions.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.