Freeport-McMoRan Insiders Sell US$3.5m Of Stock, Possibly Signalling Caution

Many Freeport-McMoRan Inc. (NYSE:FCX[1]) insiders ditched their stock over the past year, which may be of interest to the company’s shareholders. 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, if numerous insiders are selling, shareholders should investigate more.

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 Freeport-McMoRan [2]

The Chairman, Richard Adkerson, made the biggest insider sale in the last 12 months.

That single transaction was for US£2.8m worth of shares at a price of US£50.78 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It’s of some comfort that this sale was conducted at a price well above the current share price, which is US£42.70.

So it may not shed much light on insider confidence at current levels.

Insiders in Freeport-McMoRan didn’t buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

NYSE:FCX Insider Trading Volume November 17th 2024

I will like Freeport-McMoRan 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.[3]

The last three months saw significant insider selling at Freeport-McMoRan. In total, Executive VP & CFO Maree Robertson sold US£584k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the insiders think that the shares are a bargain.

Many investors like to check how much of a company is owned by insiders.

A high insider ownership often makes company leadership more mindful of shareholder interests. Freeport-McMoRan insiders own about US£294m worth of shares (which is 0.5% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

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. While it’s good to be aware of what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision.

To assist with this, we’ve discovered 1 warning sign[4] that you should run your eye over to get a better picture of Freeport-McMoRan.

Story Continues

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.[5]

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.[6]

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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References

1. ^ NYSE:FCX (au.finance.yahoo.com)
2. ^ Check out our latest analysis for Freeport-McMoRan (simplywall.st)
3. ^ list of undervalued and small cap stocks with considerable, recent, insider buying. (simplywall.st)
4. ^ 1 warning sign (simplywall.st)
5. ^ list of interesting companies. (simplywall.st)
6. ^ Get in touch (investor-research.typeform.com)