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In the last year, many General Dynamics Corporation (NYSE:GD) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
General Dynamics Insider Transactions Over The Last Year
The Chairperson & CEO, Phebe Novakovic, made the biggest insider sale in the last 12 months. That single transaction was for US$8.6m worth of shares at a price of US$263 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$272. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 3.9% of Phebe Novakovic's holding.
In the last year General Dynamics insiders didn't buy any company stock. 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!
Check out our latest analysis for General Dynamics
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Insiders At General Dynamics Have Sold Stock Recently
The last quarter saw substantial insider selling of General Dynamics shares. In total, insiders sold US$10m 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
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. General Dynamics insiders own 0.7% of the company, currently worth about US$482m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.