Stock Analysis

As Thermo Fisher Scientific Inc.'s (NYSE:TMO)) market cap dropped by US$10b, insiders who sold US$4.7m worth of stock were able to offset their losses

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NYSE:TMO
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By selling US$4.7m worth of Thermo Fisher Scientific Inc. (NYSE:TMO) stock at an average sell price of US$551 over the last year, insiders seemed to have made the most of their holdings. The company's market worth decreased by US$10b over the past week after the stock price dropped 4.9%, although insiders were able to minimize their losses

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out the opportunities and risks within the US Life Sciences industry.

The Last 12 Months Of Insider Transactions At Thermo Fisher Scientific

The Executive VP & COO, Michel Lagarde, made the biggest insider sale in the last 12 months. That single transaction was for US$3.3m worth of shares at a price of US$542 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$492. So it may not tell us anything about how insiders feel about the current share price.

In the last year Thermo Fisher Scientific insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:TMO Insider Trading Volume November 9th 2022

I will like Thermo Fisher Scientific better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Thermo Fisher Scientific insiders own 0.2% of the company, worth about US$316m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Thermo Fisher Scientific Insiders?

It doesn't really mean much that no insider has traded Thermo Fisher Scientific shares in the last quarter. While we feel good about high insider ownership of Thermo Fisher Scientific, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 1 warning sign for Thermo Fisher Scientific you should be aware of.

Of course Thermo Fisher Scientific 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.

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