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Selling US$4.7m worth of Thermo Fisher Scientific Inc. (NYSE:TMO) stock at high prices would have gotten insiders a handsome reward

Last week, Thermo Fisher Scientific Inc.'s (NYSE:TMO) stock jumped 6.1%, but insiders who sold US$4.7m worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$551, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

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

Over the last year, we can see that the biggest insider sale was by the Executive VP & COO, Michel Lagarde, for US$3.3m worth of shares, at about US$542 per share. So we know that an insider sold shares at around the present share price of US$540. 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.

Insiders in Thermo Fisher Scientific didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

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).

Insiders At Thermo Fisher Scientific Have Sold Stock Recently

The last quarter saw substantial insider selling of Thermo Fisher Scientific shares. In total, Independent Director Jim Manzi sold US$486k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Thermo Fisher Scientific insiders own about US$347m worth of shares (which is 0.2% of the company). 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 Does This Data Suggest About Thermo Fisher Scientific Insiders?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Thermo Fisher Scientific. Every company has risks, and we've spotted 2 warning signs for Thermo Fisher Scientific 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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