Anyone interested in Fabrinet (NYSE:FN) should probably be aware that the Executive Vice President of Sales & Marketing, Edward Archer, recently divested US$196k worth of shares in the company, at an average price of US$86.85 each. However, the silver lining is that the sale only reduced their total holding by 7.9%, so we’re hesitant to read anything much into it, on its own.
See our latest analysis for Fabrinet
The Last 12 Months Of Insider Transactions At Fabrinet
The CEO & Director, Seamus Grady, made the biggest insider sale in the last 12 months. That single transaction was for US$2.2m worth of shares at a price of US$71.45 each. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$89.26. 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. It is worth noting that this sale was only 23% of Seamus Grady’s holding.
Insiders in Fabrinet didn’t buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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 of Fabrinet
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Fabrinet insiders own about US$31m worth of shares. That equates to 1.0% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Fabrinet Insiders?
Insiders sold Fabrinet shares recently, but they didn’t buy any. And even if we look at the last year, we didn’t see any purchases. On the plus side, Fabrinet makes money, and is growing profits. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’d practice some caution before buying! In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Fabrinet. Every company has risks, and we’ve spotted 2 warning signs for Fabrinet you should know about.
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.
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