We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Fluor Corporation (NYSE:FLR).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
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. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Fluor Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Lead Independent Director Peter Fluor bought US$2.2m worth of shares at a price of US$45.29 per share. So it’s clear an insider wanted to buy, even at a higher price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We generally consider it a positive if insiders have been buying on market, even above the current price.
Over the last year, we can see that insiders have bought 55.51k shares worth US$2.5m. But insiders sold 702.00 shares worth US$26k. In total, Fluor insiders bought more than they sold over the last year. Their average price was about US$44.94. These transactions suggest that insiders have considered the current price of US$37.58 attractive. You can see a visual depiction of insider transactions (by 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!
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Fluor Insiders Are Selling The Stock
We have seen a bit of insider selling at Fluor, over the last three months. Taco de Haan divested only US$26k worth of shares in that time. It’s not great to see insider selling, nor the lack of recent buyers. But the amount sold isn’t enough for us to put any weight on it.
Insider Ownership of Fluor
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Fluor insiders own 0.6% of the company, worth about US$32m. 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 Fluor Insiders?
Insider selling has just outweighed insider buying in the last three months. But the difference is small, and thus, not concerning. However, our analysis of transactions over the last year is heartening. Insiders own shares in Fluor and we see no evidence to suggest they are worried about the future. Of course, the future is what matters most. So if you are interested in Fluor, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.