It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell FedEx Corporation (NYSE:FDX), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At FedEx
Lead Independent Director David Steiner made the biggest insider purchase in the last 12 months. That single transaction was for US$1.1m worth of shares at a price of US$163 each. So it’s clear an insider wanted to buy, at around the current price. That means they have been optimistic about the company in the past, though they may have changed their mind. Nonetheless, we consider it positive if insiders want to buy at around the current share price.
In the last twelve months insiders paid US$1.4m for 8.00k shares purchased. In total, FedEx insiders bought more than they sold over the last year. They paid about US$171 on average. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (US$178). You can see the insider transactions (by 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at FedEx Have Bought Stock Recently
It’s good to see that FedEx insiders have made notable investments in the company’s shares. We can see that David Steiner paid US$1.1m for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that FedEx insiders own 6.2% of the company, worth about US$2.9b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The FedEx Insider Transactions Indicate?
It is good to see recent insider purchase. We also take confidence from the longer term picture of insider transactions. Once you factor in the high insider ownership, it certainly seems like insiders are positive about FedEx. That’s what I like to see! Of course, the future is what matters most. So if you are interested in FedEx, you should check out this free report on analyst forecasts for the company.
But note: FedEx may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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