We wouldn't blame XPO Logistics, Inc. (NYSE:XPO) shareholders if they were a little worried about the fact that Jason Papastavrou, the Independent Director recently netted about US$4.5m selling shares at an average price of US$118. That's a big disposal, and it decreased their holding size by 17%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At XPO Logistics
Notably, that recent sale by Jason Papastavrou is the biggest insider sale of XPO Logistics shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$119, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower 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 17% of Jason Papastavrou's stake.
In total, XPO Logistics insiders sold more 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of XPO Logistics
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that XPO Logistics insiders own 1.5% of the company, worth about US$188m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About XPO Logistics Insiders?
Insiders sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 5 warning signs we've spotted with XPO Logistics (including 1 which is a bit concerning).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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