We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in TechnipFMC plc (NYSE:FTI).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise’.
The Last 12 Months Of Insider Transactions At TechnipFMC
Over the last year, we can see that the biggest insider sale was by the Executive VP & CFO, Maryann Mannen, for US$302k worth of shares, at about US$20.84 per share. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$8.06). So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Maryann Mannen.
Over the last year, we can see that insiders have bought 43.00k shares worth US$370k. But insiders sold 14.50k shares worth US$302k. Overall, TechnipFMC insiders were net buyers during the last year. They paid about US$8.60 on average. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
TechnipFMC is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does TechnipFMC 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that TechnipFMC insiders own 0.5% of the company, worth about US$19m. 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 TechnipFMC Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. But insiders have shown more of an appetite for the stock, over the last year. Overall we don’t see anything to make us think TechnipFMC insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing TechnipFMC. While conducting our analysis, we found that TechnipFMC has 1 warning sign and it would be unwise to ignore it.
But note: TechnipFMC 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, but not derivative transactions.
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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.
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