Some Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH) shareholders may be a little concerned to see that the MD, CEO & Executive Director, Lewis Gradon, recently sold a substantial NZ$4.7m worth of stock at a price of NZ$34.31 per share. That sale reduced their total holding by 20% which is hardly insignificant, but far from the worst we’ve seen.
The Last 12 Months Of Insider Transactions At Fisher & Paykel Healthcare
Notably, that recent sale by Lewis Gradon is the biggest insider sale of Fisher & Paykel Healthcare shares that we’ve seen in the last year. That means that an insider was selling shares at slightly below the current price (NZ$35.80). 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. 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. It is worth noting that this sale was only 20% of Lewis Gradon’s holding.
Over the last year, we can see that insiders have bought 6.76k shares worth NZ$162k. But they sold 233500 shares for NZ$7.9m. In total, Fisher & Paykel Healthcare insiders sold more than they bought over the last year. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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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. It appears that Fisher & Paykel Healthcare insiders own 0.4% of the company, worth about NZ$80m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Fisher & Paykel Healthcare Tell Us?
The stark truth for Fisher & Paykel Healthcare is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. But since Fisher & Paykel Healthcare is profitable and growing, we’re not too worried by this. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’re in no rush to buy! 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 – Fisher & Paykel Healthcare has 1 warning sign we think you should be aware of.
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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.
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