Possible Bearish Signals With Lockheed Martin Insiders Disposing Stock

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 versus if they selling is usually more beneficial, 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, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Lockheed Martin

Lockheed Martin Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chief Operating Officer, Frank St. John, for US$3.2m worth of shares, at about US$474 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$414. So it is hard to draw any strong conclusion from it.

In total, Lockheed Martin insiders sold more than they bought over the last year. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Lockheed Martin Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Lockheed Martin. Specifically, insider John Donovan bought US$250k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Insider Ownership Of Lockheed Martin

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.09% of Lockheed Martin shares, worth about US$89m. 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 Does This Data Suggest About Lockheed Martin Insiders?

It is good to see the recent insider purchase. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in Lockheed Martin, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Lockheed Martin has 1 warning sign we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.