We wouldn't blame FMC Corporation (NYSE:FMC) shareholders if they were a little worried about the fact that Pierre Brondeau, the Chairman & CEO recently netted about US$2.3m selling shares at an average price of US$93.45. However, that sale only accounted for 7.0% of their holding, so arguably it doesn't say much about their conviction.
FMC Insider Transactions Over The Last Year
Notably, that recent sale by Chairman & CEO Pierre Brondeau was not the only time they sold FMC shares this year. They previously made an even bigger sale of -US$4.0m worth of shares at a price of US$88.90 per share. That means that even when the share price was below the current price of US$97.52, 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. 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 only 11%of Pierre Brondeau's holding.
Over the last year we saw more insider selling of FMC shares, than buying. The chart below shows insider transactions (by 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 like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does FMC 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 FMC insiders own 0.7% of the company, worth about US$86m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About FMC Insiders?
An insider hasn't bought FMC stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, FMC makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd think twice before buying! Of course, the future is what matters most. So if you are interested in FMC, you should check out this free report on analyst forecasts for the company.
But note: FMC 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.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.