Leidos Holdings Insiders Sold US$1.5m Of Shares Suggesting Hesitancy

Many Leidos Holdings, Inc. (NYSE:LDOS) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Leidos Holdings

The Last 12 Months Of Insider Transactions At Leidos Holdings

The Independent Director, David Fubini, made the biggest insider sale in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$128 each. That means that even when the share price was below the current price of US$145, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 just 35% of David Fubini's stake.

Happily, we note that in the last year insiders paid US$571k for 3.71k shares. But insiders sold 10.98k shares worth US$1.5m. Over the last year we saw more insider selling of Leidos Holdings shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Leidos Holdings better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Leidos Holdings Insiders Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Leidos Holdings. In total, Independent Director Noel Geer bought US$322k worth of shares in that time. But Independent Director Robert Kovarik sold shares worth US$194k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Does Leidos Holdings 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. We usually like to see fairly high levels of insider ownership. Leidos Holdings insiders own about US$152m worth of shares (which is 0.8% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Leidos Holdings Insider Transactions Indicate?

The recent insider purchase is heartening. On the other hand the transaction history, over the last year, isn't so positive. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Leidos Holdings.

But note: Leidos Holdings 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.