Possible bearish signals as Thermo Fisher Scientific Inc. (NYSE:TMO) insiders disposed of US$4.7m worth of stock
Many Thermo Fisher Scientific Inc. (NYSE:TMO) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Thermo Fisher Scientific
The Last 12 Months Of Insider Transactions At Thermo Fisher Scientific
The Executive VP & COO, Michel Lagarde, made the biggest insider sale in the last 12 months. That single transaction was for US$3.3m worth of shares at a price of US$542 each. So what is clear is that an insider saw fit to sell at around the current price of US$518. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
In the last year Thermo Fisher Scientific insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Thermo Fisher Scientific better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Thermo Fisher Scientific 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. Thermo Fisher Scientific insiders own 0.2% of the company, currently worth about US$333m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Thermo Fisher Scientific Tell Us?
The fact that there have been no Thermo Fisher Scientific insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Thermo Fisher Scientific insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Thermo Fisher Scientific has 1 warning sign and it would be unwise to ignore this.
But note: Thermo Fisher Scientific 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.
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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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