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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Tyson Foods, Inc. (NYSE:TSN), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Tyson Foods
In the last twelve months, the biggest single sale by an insider was when Thomas Hayes sold US$1.4m worth of shares at a price of US$68.85 per share. That means that an insider was selling shares at around the current price of US$61.92. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.
In the last twelve months insiders purchased 9.60k shares for US$602k. On the other hand they divested 73.41k shares, for US$5.2m. Over the last year we saw more insider selling of Tyson Foods shares, than buying. The average sell price was around US$70.72. It’s not particularly great to see insiders were selling shares around current prices. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. 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!
Tyson Foods is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Tyson Foods Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at Tyson Foods, over the last three months. We can see that Gaurdie Banister paid US$400k for shares in the company. On the other hand, insiders netted US$104k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Does Tyson Foods 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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Tyson Foods insiders own 1.4% of the company, currently worth about US$309m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Tyson Foods Tell Us?
It is good to see recent insider purchase. But we can’t say the same for the transactions over the last 12 months. Overall, we’d prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, Tyson Foods insiders are reasonably well aligned, and optimistic for the future. Of course, the future is what matters most. So if you are interested in Tyson Foods, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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 email@example.com.