Don't Ignore The Insider Selling In Fisher & Paykel Healthcare

We wouldn't blame Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH) shareholders if they were a little worried about the fact that Lewis Gradon, the MD, CEO & Executive Director recently netted about NZ$1.8m selling shares at an average price of NZ$38.48. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 7.4%.

View our latest analysis for Fisher & Paykel Healthcare

The Last 12 Months Of Insider Transactions At Fisher & Paykel Healthcare

In fact, the recent sale by Lewis Gradon was the biggest sale of Fisher & Paykel Healthcare shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of NZ$37.60. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

In the last twelve months insiders purchased 4.10k shares for NZ$111k. But they sold 78.30k shares for NZ$2.6m. In total, Fisher & Paykel Healthcare insiders sold more than they bought over the last year. The sellers received a price of around NZ$33.27, on average. It's not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of Fisher & Paykel Healthcare

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that Fisher & Paykel Healthcare insiders own 0.4% of the company, worth about NZ$85m. 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 Fisher & Paykel Healthcare Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at Fisher & Paykel Healthcare, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. 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. At Simply Wall St, we found 3 warning signs for Fisher & Paykel Healthcare that deserve your attention before buying any shares.

Of course Fisher & Paykel Healthcare 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.