Steven Strang Is The President of FEI-Zyfer of Frequency Electronics, Inc. (NASDAQ:FEIM) And They Just Sold 50% Of Their Shares

We note that the Frequency Electronics, Inc. (NASDAQ:FEIM) President of FEI-Zyfer, Steven Strang, recently sold US$71k worth of stock for US$10.77 per share. It wasn't a huge sale, but it did reduce their holding by 50%. This does not instill confidence.

See our latest analysis for Frequency Electronics

Frequency Electronics Insider Transactions Over The Last Year

In fact, the recent sale by Steven Strang was the biggest sale of Frequency Electronics shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even below the current price of US$11.26. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 50% of Steven Strang's stake.

In the last year Frequency Electronics insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does Frequency Electronics Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 14% of Frequency Electronics shares, worth about US$14m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Frequency Electronics Insider Transactions Indicate?

Insiders sold Frequency Electronics shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for Frequency Electronics (1 is potentially serious!) and we strongly recommend you look at these before investing.

Of course Frequency Electronics 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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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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