Frontdoor Insiders Sell US$1.5m Of Stock, Possibly Signalling Caution

Many Frontdoor, Inc. (NASDAQ:FTDR) 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, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Frontdoor

In the last twelve months, the biggest single sale by an insider was when the Senior VP & Chief Operations Officer, Evan Iverson, sold US$941k worth of shares at a price of US$58.84 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$39.16). So it may not shed much light on insider confidence at current levels.

In the last twelve months insiders purchased 10.00k shares for US$425k. On the other hand they divested 27.50k shares, for US$1.5m. All up, insiders sold more shares in Frontdoor 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for Frontdoor

I will like Frontdoor 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.

Insiders At Frontdoor Have Bought Stock Recently

Over the last quarter, Frontdoor insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$425k worth of shares. This could be interpreted as suggesting a positive outlook.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Frontdoor insiders own about US$12m worth of shares. That equates to 0.4% 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.

So What Do The Frontdoor Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. But we can't say the same for the transactions over the last 12 months. We don't take much heart from transactions by Frontdoor insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. In short they are likely aligned with shareholders. 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. While conducting our analysis, we found that Frontdoor has 1 warning sign and it would be unwise to ignore it.

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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.