L3Harris Technologies Insiders Sell US$8.9m Of Stock, Possibly Signalling Caution

The fact that multiple L3Harris Technologies, Inc. (NYSE:LHX) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. 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, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

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.

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L3Harris Technologies Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Scott Mikuen, sold US$2.4m worth of shares at a price of US$230 per share. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$233. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 18% of Scott Mikuen's holding.

L3Harris Technologies insiders didn't buy any shares over the last year. 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!

Check out our latest analysis for L3Harris Technologies

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L3Harris Technologies Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at L3Harris Technologies. Specifically, insiders ditched US$1.8m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership

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. It's great to see that L3Harris Technologies insiders own 0.3% of the company, worth about US$141m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About L3Harris Technologies Insiders?

Insiders sold L3Harris Technologies shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, L3Harris Technologies makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - L3Harris Technologies has 2 warning signs we think you should be aware of.

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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.