Some TE Connectivity Ltd. (NYSE:TEL) shareholders may be a little concerned to see that the Executive VP & CFO, Heath Mitts, recently sold a whopping US$1.5m worth of stock at a price of US$94.75 per share. That diminished their holding by a very significant 60%, which arguably implies a strong desire to reallocate capital.
The Last 12 Months Of Insider Transactions At TE Connectivity
In the last twelve months, the biggest single sale by an insider was when the Chairman of the Board, Thomas Lynch, sold US$4.0m worth of shares at a price of US$93.98 per share. That means that an insider was selling shares at below the current price (US$94.63). 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. 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. We note that the biggest single sale was only 18% of Thomas Lynch’s holding.
In total, TE Connectivity insiders sold more than they bought over the last year. The average sell price was around US$94.03. We don’t gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that TE Connectivity insiders own 0.3% of the company, worth about US$84m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About TE Connectivity Insiders?
Insiders sold stock recently, but they haven’t been buying. And our longer term analysis of insider transactions didn’t bring confidence, either. Insiders own shares, but we’re still pretty cautious, given the history of sales. So we’d only buy after careful consideration. Of course, the future is what matters most. So if you are interested in TE Connectivity, you should check out this free report on analyst forecasts for the company.
Of course TE Connectivity 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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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