Possible Bearish Signals With Fisher & Paykel Healthcare Insiders Disposing Stock

In the last year, many Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Fisher & Paykel Healthcare

Fisher & Paykel Healthcare Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the MD, CEO & Executive Director, Lewis Gradon, sold NZ$1.8m worth of shares at a price of NZ$38.48 per share. So what is clear is that an insider saw fit to sell at around the current price of NZ$38.00. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Happily, we note that in the last year insiders paid NZ$137k for 4.80k shares. On the other hand they divested 149.91k shares, for NZ$5.5m. Over the last year we saw more insider selling of Fisher & Paykel Healthcare shares, than buying. The average sell price was around NZ$36.79. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Fisher & Paykel Healthcare better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Fisher & Paykel Healthcare

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Fisher & Paykel Healthcare insiders own about NZ$86m worth of shares. That equates to 0.4% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Fisher & Paykel Healthcare Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Fisher & Paykel Healthcare insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 2 warning signs for Fisher & Paykel Healthcare you should be aware of.

But note: Fisher & Paykel Healthcare 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.