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How Much Are Danaher Corporation (NYSE:DHR) Insiders Spending On Buying 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 shareholders might well want to know whether insiders have been buying or selling shares in Danaher Corporation (NYSE:DHR).

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 in the 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. 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'.

Check out our latest analysis for Danaher

Danaher Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Co-Founder & Director Mitchell Rales for US$23m worth of shares, at about US$167 per share. We do like to see buying, but this purchase was made at well below the current price of US$223. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Mitchell Rales bought 176.03k shares over the last 12 months at an average price of US$176. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Danaher Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at Danaher. In total, insiders sold US$3.8m worth of shares in that time. On the flip side, Co-Founder & Director Mitchell Rales spent US$1.5m on purchasing shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Does Danaher Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Danaher insiders own 11% of the company, currently worth about US$18b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Danaher Insiders?

Unfortunately, there has been more insider selling of Danaher stock, than buying, in the last three months. On the other hand, the insider transactions over the last year are encouraging. And insider ownership remains quite considerable. So we're happy to look past recent trading. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Danaher. At Simply Wall St, we found 3 warning signs for Danaher that deserve your attention before buying any shares.

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.

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. 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.

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

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