Don't Ignore The Fact That This Insider Just Sold Some Shares In Federated Hermes, Inc. (NYSE:FHI)

By
Simply Wall St
Published
May 16, 2021
NYSE:FHI

We wouldn't blame Federated Hermes, Inc. (NYSE:FHI) shareholders if they were a little worried about the fact that John Fisher, the VP & Director recently netted about US$1.2m selling shares at an average price of US$33.27. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 5.6%.

View our latest analysis for Federated Hermes

Federated Hermes Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Vice Chairman and President of Federated Intl Mgmt & Federated Intl Securities Corp., Gordon Ceresino, sold US$1.3m worth of shares at a price of US$30.99 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$33.25. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 15% of Gordon Ceresino's stake.

Insiders in Federated Hermes didn't buy any shares in 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!

insider-trading-volume
NYSE:FHI Insider Trading Volume May 17th 2021

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

Does Federated Hermes Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Federated Hermes insiders own 5.0% of the company, worth about US$156m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Federated Hermes Tell Us?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since Federated Hermes is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Federated Hermes.

Of course Federated Hermes 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, but not derivative transactions.

Promoted
When trading Federated Hermes or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.


This article by Simply Wall St is general in nature. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


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

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record.