We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Fortune Brands Home & Security, Inc. (NYSE:FBHS).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
The Last 12 Months Of Insider Transactions At Fortune Brands Home & Security
In the last twelve months, the biggest single sale by an insider was when Danny Luburic sold US$94k worth of shares at a price of US$46.96 per share. So what is clear is that an insider saw fit to sell at around the current price of US$45.56. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price. Danny Luburic was the only individual insider to sell shares in the last twelve months.
The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Fortune Brands Home & Security
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. Insiders own 0.7% of Fortune Brands Home & Security shares, worth about US$48m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Fortune Brands Home & Security Insider Transactions Indicate?
An insider hasn’t bought Fortune Brands Home & Security stock in the last three months, but there was some selling. And there weren’t any purchases to give us comfort, over the last year. Insiders own shares, but we’re still pretty cautious, given the history of sales. So we’d only buy after careful consideration. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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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. Thank you for reading.