Don't Ignore The Insider Selling In Veralto

Anyone interested in Veralto Corporation (NYSE:VLTO) should probably be aware that the Senior Vice President of Product Quality & Innovation, Mattias Byström, recently divested US$318k worth of shares in the company, at an average price of US$106 each. However, the silver lining is that the sale only reduced their total holding by 8.8%, so we're hesitant to read anything much into it, on its own.

Check out our latest analysis for Veralto

The Last 12 Months Of Insider Transactions At Veralto

Over the last year, we can see that the biggest insider sale was by the Senior Vice President of Water Quality, Melissa Aquino, for US$752k worth of shares, at about US$93.56 per share. That means that even when the share price was below the current price of US$107, 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. It is worth noting that this sale was 89% of Melissa Aquino's holding.

Over the last year we saw more insider selling of Veralto shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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

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. Veralto insiders own 4.0% of the company, currently worth about US$1.1b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Veralto Insiders?

An insider sold Veralto shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that Veralto has 1 warning sign and it would be unwise to ignore it.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com