Insiders Who Sold US$1.7m Of FARO Technologies Made The Right Call

While FARO Technologies, Inc. (NASDAQ:FARO) shareholders have had a good week with the stock up 29%, they shouldn't let their guards down. Even though stock prices were relatively low, insiders elected to sell US$1.7m worth of stock in the last year, which could indicate some expected downturn.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At FARO Technologies

The Independent Chairman of the Board, Yuval Wasserman, made the biggest insider sale in the last 12 months. That single transaction was for US$335k worth of shares at a price of US$16.64 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$31.23. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 17% of Yuval Wasserman's stake.

FARO Technologies insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for FARO Technologies

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).

FARO Technologies Insiders Are Selling The Stock

The last quarter saw substantial insider selling of FARO Technologies shares. In total, insiders dumped US$374k 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 FARO Technologies

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that FARO Technologies insiders own 2.1% of the company, worth about US$11m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At FARO Technologies Tell Us?

Insiders haven't bought FARO Technologies stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing FARO Technologies. For example - FARO Technologies has 1 warning sign we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.