Resideo Technologies Insiders Sold US$563k Of Shares Suggesting Hesitancy

Resideo Technologies, Inc. (NYSE:REZI) shareholders may have reason to be concerned, as several insiders sold their shares over the past year. 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, 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 would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Resideo Technologies

The Last 12 Months Of Insider Transactions At Resideo Technologies

Over the last year, we can see that the biggest insider sale was by the Senior VP & Executive Advisor, Phillip Theodore, for US$329k worth of shares, at about US$16.45 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$20.75. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 13% of Phillip Theodore's stake.

In the last year Resideo Technologies 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!

I will like Resideo Technologies better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Resideo Technologies 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Resideo Technologies insiders own about US$36m worth of shares. That equates to 1.2% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Resideo Technologies Insider Transactions Indicate?

The fact that there have been no Resideo Technologies insider transactions recently certainly doesn't bother us. Our analysis of Resideo Technologies insider transactions leaves us cautious. 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 Resideo Technologies. Case in point: We've spotted 1 warning sign for Resideo Technologies you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.