Don't Ignore The Insider Selling In Littelfuse

We wouldn't blame Littelfuse, Inc. (NASDAQ:LFUS) shareholders if they were a little worried about the fact that Ryan Stafford, the Executive VP recently netted about US$580k selling shares at an average price of US$268. That's a big disposal, and it decreased their holding size by 11%, which is notable but not too bad.

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The Last 12 Months Of Insider Transactions At Littelfuse

Over the last year, we can see that the biggest insider purchase was by Independent Director Anthony Grillo for US$4.1m worth of shares, at about US$236 per share. That means that an insider was happy to buy shares at around the current price of US$253. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Littelfuse share holders is that an insider was buying at near the current price. Anthony Grillo was the only individual insider to buy shares in the last twelve months.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Littelfuse

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Does Littelfuse Boast High Insider Ownership?

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Littelfuse insiders own 1.1% of the company, worth about US$69m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Littelfuse Insiders?

An insider hasn't bought Littelfuse stock in the last three months, but there was some selling. On the other hand, the insider transactions over the last year are encouraging. We like that insiders own a fair amount of the company. So we're not overly bothered by recent selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 3 warning signs with Littelfuse and understanding them should be part of your investment process.

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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.