Many Lockheed Martin Corporation (NYSE:LMT) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Lockheed Martin
The Chief Operating Officer, Frank St. John, made the biggest insider sale in the last 12 months. That single transaction was for US$3.5m worth of shares at a price of US$438 each. That means that an insider was selling shares at slightly below the current price (US$496). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 100% of Frank St. John's holding.
In total, Lockheed Martin insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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).
Lockheed Martin Insiders Bought Stock Recently
It's good to see that Lockheed Martin insiders have made notable investments in the company's shares. Specifically, insider John Donovan bought US$251k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that Lockheed Martin insiders own 0.07% of the company, worth about US$87m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Lockheed Martin Insider Transactions Indicate?
It is good to see the recent insider purchase. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in Lockheed Martin, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. In short they are likely aligned with shareholders. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Lockheed Martin. While conducting our analysis, we found that Lockheed Martin has 1 warning sign and it would be unwise to ignore it.
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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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.
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