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Have Sanderson Farms, Inc. (NASDAQ:SAFM) Insiders Been Selling Their Stock?

Simply Wall St

We'd be surprised if Sanderson Farms, Inc. (NASDAQ:SAFM) shareholders haven't noticed that an insider, Robert Khayat, recently sold US$268k worth of stock at US$155 per share. The eyebrow raising move amounted to a reduction of 14% in their holding.

Check out our latest analysis for Sanderson Farms

Sanderson Farms Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the President, Lampkin Butts, for US$1.3m worth of shares, at about US$129 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$156. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 7.8% of Lampkin Butts's stake.

We note that in the last year insiders divested 13703 shares for a total of US$1.8m. In the last year Sanderson Farms insiders didn't buy any company stock. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NasdaqGS:SAFM Recent Insider Trading, September 25th 2019

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).

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Sanderson Farms insiders own 5.4% of the company, worth about US$188m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Sanderson Farms Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And even if we look to the last year, we didn't see any purchases. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. Of course, the future is what matters most. So if you are interested in Sanderson Farms, you should check out this free report on analyst forecasts for the company.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.