HEICO Corporation (NYSE:HEI) insiders sold US$991,000 worth of stock last year, something shareholders might not want to ignore
While it’s been a great week for HEICO Company (NYSE:HEI) after shares gained 4.6%, they should take it with a grain of salt. The fact that insiders chose to dispose of stocks worth US$991,000 over the past 12 months, even though prices were relatively low, could indicate some anticipated weakness.
While insider trading isn’t the most important thing when it comes to long-term investing, logic dictates that you should pay attention to whether insiders are buying or selling stocks.
See our latest analysis for HEICO
The last 12 months of insider trading at HEICO
Over the past year, we can see that the largest insider sale was by independent director Alan Schriesheim for US$740,000 worth of stock, at around US$148 per share. Clearly, then, an insider wanted to take money off the table, even below the current price of US$155. We generally consider it negative if insiders sold, especially if they did below the current price, as this implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, this is only a weak signal. This single sale represented only 4.2% of Alan Schriesheim’s stake.
Fortunately, we note that last year insiders paid US$208,000 for 1,670,000 shares. But they sold 6.87k shares for $991,000. In total, HEICO insiders sold more than they bought over the past year. You can see insider trading (by companies and individuals) over the past year illustrated in the table below. If you want to know exactly who sold, how much and when, just click on the chart below!
If you’re like me, then you do not want to miss this free list of growing companies insiders are buying.
HEICO insiders sell the stock
Over the past three months, we have seen significant insider selling at HEICO. In total, independent director Alan Schriesheim sold $740,000 worth of shares during this period, and we did not record any purchases. In light of this, it’s hard to argue that all insiders think stocks are a good deal.
Does HEICO boast of high insider ownership?
I like to look at how many shares insiders own in a company, to help me get a sense of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely insiders will be incentivized to build the business for the long term. HEICO insiders own approximately $2.7 billion in stock (or 14% of the company). This type of significant insider ownership generally increases the chances that the company will be run in the best interests of all shareholders.
So what does this data suggest about HEICO insiders?
An insider recently sold shares, but did not buy. And our longer-term analysis of insider trading didn’t provide confidence either. On the positive side, HEICO makes money and increases its profits. It’s good to see strong insider ownership, but insider selling leaves us cautious. While we like to know what’s going on with insider ownership and trading, we also make sure to consider the risks a stock faces before making any investment decisions. To help you, we found 1 warning sign that you should scan your eye to get a better picture of HEICO.
Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of interesting companies.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.