Insiders were net sellers of Textron Inc.'s (NYSE:TXT ) stock during the past year. That is, insiders sold more stock than they bought.
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.
See our latest analysis for Textron
Textron Insider Transactions Over The Last Year
In fact, the recent sale by Ronal Clark was the biggest sale of Textron shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$75.99, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 67% of Ronal Clark's holding.
Ronal Clark ditched 14.35k shares over the year. The average price per share was US$75.18. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Textron better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders At Textron Have Sold Stock Recently
The last quarter saw substantial insider selling of Textron shares. In total, Independent Lead Director Ronal Clark sold US$1.1m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
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. It appears that Textron insiders own 0.5% of the company, worth about US$67m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Textron Insiders?
An insider hasn't bought Textron stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. On the plus side, Textron makes money, and is growing profits. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Textron. For example - Textron has 1 warning sign we think you should be aware of.
Of course Textron may not be the best stock to buy. So you may wish to see this free collection of high quality 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 of direct interests only, but not derivative transactions or indirect interests.
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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.
