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Franklin Electric Co., Inc. (NASDAQ:FELE) Insiders Have Been Selling

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Franklin Electric Co., Inc. (NASDAQ:FELE).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.

Check out our latest analysis for Franklin Electric

The Last 12 Months Of Insider Transactions At Franklin Electric

Over the last year, we can see that the biggest insider sale was by the VP & CFO, John Haines, for US$221k worth of shares, at about US$55.18 per share. That means that an insider was selling shares at around the current price of US$54.64. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

We note that in the last year insiders divested 24492 shares for a total of US$1.3m. Insiders in Franklin Electric didn't buy any shares in the last year. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NasdaqGS:FELE Recent Insider Trading, November 6th 2019
NasdaqGS:FELE Recent Insider Trading, November 6th 2019

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Franklin Electric Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Franklin Electric. Specifically, insiders ditched US$340k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership of Franklin Electric

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's great to see that Franklin Electric insiders own 17% of the company, worth about US$426m. 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 Do The Franklin Electric Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Franklin Electric is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Franklin Electric.

Of course Franklin Electric may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

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 editorial-team@simplywallst.com. 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.

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