Trade Alert: Lead Independent Director Of Federal Signal Brenda Reichelderfer Has Sold Stock

We wouldn't blame Federal Signal Corporation (NYSE:FSS) shareholders if they were a little worried about the fact that Brenda Reichelderfer, the Lead Independent Director recently netted about US$2.4m selling shares at an average price of US$92.99. That's a big disposal, and it decreased their holding size by 31%, which is notable but not too bad.

See our latest analysis for Federal Signal

The Last 12 Months Of Insider Transactions At Federal Signal

Notably, that recent sale by Brenda Reichelderfer is the biggest insider sale of Federal Signal shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of US$87.69. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. 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 year Federal Signal insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. 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 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).

Does Federal Signal Boast High Insider Ownership?

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. Federal Signal insiders own about US$129m worth of shares (which is 2.4% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Federal Signal Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. On the plus side, Federal Signal makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Federal Signal. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Federal Signal.

But note: Federal Signal 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.