Don't Ignore The Insider Selling In Flowers Foods

We wouldn't blame Flowers Foods, Inc. (NYSE:FLO) shareholders if they were a little worried about the fact that A. McMullian, the CEO & Chairman of Board recently netted about US$4.5m selling shares at an average price of US$12.83. That's a big disposal, and it decreased their holding size by 12%, which is notable but not too bad.

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Flowers Foods Insider Transactions Over The Last Year

In fact, the recent sale by A. McMullian was the biggest sale of Flowers Foods shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of US$12.68. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Happily, we note that in the last year insiders paid US$202k for 12.00k shares. But insiders sold 353.60k shares worth US$4.5m. In total, Flowers Foods insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Flowers Foods

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).

Insider Ownership Of Flowers Foods

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. Flowers Foods insiders own about US$202m worth of shares (which is 7.5% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Flowers Foods Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Flowers Foods makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Flowers Foods. At Simply Wall St, we found 2 warning signs for Flowers Foods that deserve your attention before buying any shares.

Of course Flowers Foods 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.