Stock Analysis

Trade Alert: Independent Director Of Fabrinet Frank Levinson Has Sold Stock

NYSE:FN
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We wouldn't blame Fabrinet (NYSE:FN) shareholders if they were a little worried about the fact that Frank Levinson, the Independent Director recently netted about US$1.5m selling shares at an average price of US$242. That diminished their holding by a very significant 58%, which arguably implies a strong desire to reallocate capital.

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The Last 12 Months Of Insider Transactions At Fabrinet

The President & COO, Harpal Gill, made the biggest insider sale in the last 12 months. That single transaction was for US$4.6m worth of shares at a price of US$216 each. That means that even when the share price was below the current price of US$246, an insider wanted to cash in some shares. 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. 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. We note that the biggest single sale was 100% of Harpal Gill's holding.

In the last year Fabrinet insiders didn't buy any company stock. 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!

insider-trading-volume
NYSE:FN Insider Trading Volume May 27th 2024

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Insider Ownership Of Fabrinet

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.3% of Fabrinet shares, worth about US$27m. 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 Fabrinet Insiders?

Insiders sold Fabrinet shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. On the plus side, Fabrinet makes money, and is growing profits. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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. For example - Fabrinet has 1 warning sign we think you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.