We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in FireEye, Inc. (NASDAQ:FEYE).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
FireEye Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when President Travis Reese sold US$1.7m worth of shares at a price of US$16.71 per share. That means that an insider was selling shares at around the current price of US$16.67. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
Over the last year, we note insiders sold 340.68k shares worth US$5.7m. In total, FireEye insiders sold more than they bought over the last year. The average sell price was around US$16.69. It’s not particularly great to see insiders were selling shares around current prices. Since insiders sell for many reasons, we wouldn’t put too much weight on it. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like FireEye better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
FireEye Insiders Are Selling The Stock
The last quarter saw substantial insider selling of FireEye shares. Specifically, insiders ditched US$4.3m worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
Insider Ownership of FireEye
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. FireEye insiders own about US$93m worth of shares. That equates to 2.8% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About FireEye Insiders?
Insiders haven’t bought FireEye stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’re in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for FireEye.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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