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Lockheed Martin Corporation (NYSE:LMT) insiders sold US$13m worth of stock suggesting impending weakness.

In the last year, many Lockheed Martin Corporation (NYSE:LMT) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Lockheed Martin

Lockheed Martin Insider Transactions Over The Last Year

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 around the current price of US$414. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

In total, Lockheed Martin insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

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).

Insiders At Lockheed Martin Have Sold Stock Recently

We've seen more insider selling than insider buying at Lockheed Martin recently. In that time, insider Gregory Ulmer dumped US$2.9m worth of shares. Meanwhile insider John Donovan bought US$250k worth. Generally this level of net selling might be considered a bit bearish.

Does Lockheed Martin Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Lockheed Martin insiders own about US$68m worth of shares. That equates to 0.06% of the company. 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?

The insider sales have outweighed the insider buying, at Lockheed Martin, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Lockheed Martin has 3 warning signs we think you should be aware of.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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