This Frontdoor Insider Reduced Their Stake By 42%

Insiders were net sellers of Frontdoor, Inc.'s (NASDAQ:FTDR ) stock during the past year. That is, insiders sold more stock than they bought.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Frontdoor

Frontdoor Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Senior VP, Jeffrey Fiarman, for US$515k worth of shares, at about US$44.81 per share. That means that even when the share price was below the current price of US$57.44, an insider wanted to cash in some shares. 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. 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 only 42% of Jeffrey Fiarman's holding. Jeffrey Fiarman was the only individual insider to sell over the last year.

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).

Does Frontdoor 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. Insiders own 0.6% of Frontdoor shares, worth about US$25m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Frontdoor Tell Us?

It doesn't really mean much that no insider has traded Frontdoor shares in the last quarter. We don't take much encouragement from the transactions by Frontdoor insiders. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Frontdoor. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Frontdoor.

Of course Frontdoor may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.