Consumer Durables News

As Garmin Ltd.’s (NYSE:GRMN)) market cap dropped by US$573m, insiders who sold US$1.6m worth of stock were able to offset their losses


Insiders seem to have made the most of their holdings by selling US$1.6m worth of Garmin Ltd. (NYSE:GRMN) stock at an average sell price of US$97.81 during the past year. The company’s market valuation decreased by US$573m after the stock price dropped 3.3% over the past week, but insiders were spared from painful losses.

Although we don’t think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Garmin

Garmin Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the President, Clifton Albert Pemble, for US$1.6m worth of shares, at about US$97.81 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$86.95). So it is hard to draw any strong conclusion from it. Clifton Albert Pemble was the only individual insider to sell shares in the last twelve months.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NYSE:GRMN Insider Trading Volume September 16th 2022

I will like Garmin 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 Garmin Have Sold Stock Recently

The last three months saw significant insider selling at Garmin. Specifically, President Clifton Albert Pemble ditched US$1.6m worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.

Insider Ownership Of Garmin

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Garmin insiders own 20% of the company, currently worth about US$3.3b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Garmin Insiders?

An insider hasn’t bought Garmin stock in the last three months, but there was some selling. And even if we look at the last year, we didn’t see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Garmin has 2 warning signs and it would be unwise to ignore these.

But note: Garmin may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.

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.

Valuation is complex, but we’re helping make it simple.

Find out whether Garmin is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis



Source link

Leave a Comment