Senior VP & Chief Operations Officer Evan Iverson Sold A Bunch Of Shares In Frontdoor

We wouldn't blame Frontdoor, Inc. (NASDAQ:FTDR) shareholders if they were a little worried about the fact that Evan Iverson, the Senior VP & Chief Operations Officer recently netted about US$941k selling shares at an average price of US$58.84. Probably the most concerning element of the whole transaction is that the disposal amounted to 76% of their entire holding.

Check out our latest analysis for Frontdoor

Frontdoor Insider Transactions Over The Last Year

In fact, the recent sale by Evan Iverson was the biggest sale of Frontdoor shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$58.93. 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. 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 76% of Evan Iverson's stake.

Insiders in Frontdoor didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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.

Does Frontdoor Boast High Insider Ownership?

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. Frontdoor insiders own about US$19m 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?

An insider sold Frontdoor shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Frontdoor is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! 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. You'd be interested to know, that we found 2 warning signs for Frontdoor and we suggest you have a look.

But note: Frontdoor 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.