Lockheed Martin Insiders Sell US$13m Of Stock, Possibly Signalling Caution

In the last year, many Lockheed Martin Corporation (NYSE:LMT) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Lockheed Martin

The Last 12 Months Of Insider Transactions At Lockheed Martin

In the last twelve months, the biggest single sale by an insider was when the Chief Operating Officer, Frank St. John, sold US$2.8m worth of shares at a price of US$428 per share. That means that even when the share price was below the current price of US$539, an insider wanted to cash in some shares. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 100% of Frank St. John's stake.

In the last year Lockheed Martin insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Does Lockheed Martin 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Lockheed Martin insiders own about US$72m worth of shares. That equates to 0.05% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Lockheed Martin Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at Lockheed Martin in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lockheed Martin. You'd be interested to know, that we found 1 warning sign for Lockheed Martin and we suggest you have a look.

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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.