Possible Bearish Signals With Old Dominion Freight Line Insiders Disposing Stock

The fact that multiple Old Dominion Freight Line, Inc. (NASDAQ:ODFL) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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Old Dominion Freight Line Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive Chairman of the Board, David Congdon, for US$14m worth of shares, at about US$226 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$165. So it is hard to draw any strong conclusion from it.

All up, insiders sold more shares in Old Dominion Freight Line than they bought, 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!

See our latest analysis for Old Dominion Freight Line

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Old Dominion Freight Line Insiders Are Selling The Stock

We've seen more insider selling than insider buying at Old Dominion Freight Line recently. In total, Director Greg Gantt sold US$1.3m worth of shares in that time. On the other hand we note Executive VP Adam Satterfield bought US$432k worth of shares , as previously mentioned . Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Insider Ownership Of Old Dominion Freight Line

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. Old Dominion Freight Line insiders own 11% of the company, currently worth about US$3.7b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Old Dominion Freight Line Insiders?

The insider sales have outweighed the insider buying, at Old Dominion Freight Line, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Old Dominion Freight Line. While conducting our analysis, we found that Old Dominion Freight Line has 1 warning sign and it would be unwise to ignore it.

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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.