Have Insiders Been Selling Lockheed Martin Corporation (NYSE:LMT) Shares?
We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Lockheed Martin Corporation (NYSE:LMT).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
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The Last 12 Months Of Insider Transactions At Lockheed Martin
In the last twelve months, the biggest single sale by an insider was when Chairman Marillyn Hewson sold US$8.1m worth of shares at a price of US$325 per share. So what is clear is that an insider saw fit to sell at around the current price of US$278. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
In the last twelve months insiders netted US$24m for 71.47k shares sold. All up, insiders sold more shares in Lockheed Martin than they bought, over the last year. The sellers received a price of around US$332, on average. We don’t gain much confidence from insider selling near the recent share price. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Lockheed Martin Have Sold Stock Recently
The last quarter saw substantial insider selling of Lockheed Martin shares. In total, Executive VP & CFO Bruce Tanner dumped US$3.5m 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 directors think that the shares are a bargain.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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. Insiders own 0.07% of Lockheed Martin shares, worth about US$56m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Lockheed Martin Tell Us?
An insider hasn’t bought Lockheed Martin stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn’t show any insider buying. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’d think twice before buying! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Lockheed Martin.
But note: Lockheed Martin 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
