Insiders Sold US$667k Of Unisys Stock Possibly Sending Warning Sign
Last week, Unisys Corporation's (NYSE:UIS) stock jumped 17%, but insiders who sold US$667k worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$4.06, 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.
Unisys Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Independent Director, Troy Richardson, sold US$484k worth of shares at a price of US$4.40 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$2.87. So it may not tell us anything about how insiders feel about the current share price.
Unisys insiders didn't buy any shares over 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!
Check out our latest analysis for Unisys
I will like Unisys better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insiders At Unisys Have Sold Stock Recently
The last three months saw some Unisys insider selling. VP, Chief Accounting Officer & Corporate Controller David Brown sold just US$27k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 12% of Unisys shares, worth about US$25m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Unisys Insider Transactions Indicate?
While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. Recent sales exacerbate our caution arising from analysis of Unisys insider transactions. But we do like the fact that insiders own a fair chunk of the company. 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. Be aware that Unisys is showing 2 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...
But note: Unisys 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 of direct interests only, but not derivative transactions or indirect interests.
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