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Fox Corporation (NASDAQ:FOXA) Insiders Increased Their Holdings

Simply Wall St
·4-min read

It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Fox Corporation (NASDAQ:FOXA).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

Check out our latest analysis for Fox

The Last 12 Months Of Insider Transactions At Fox

Over the last year, we can see that the biggest insider purchase was by Executive Chairman & CEO Lachlan Murdoch for US$5.9m worth of shares, at about US$25.74 per share. So it's clear an insider wanted to buy, at around the current price, which is US$26.41. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Fox share holders is that an insider was buying at near the current price. Lachlan Murdoch was the only individual insider to buy during the last year.

Lachlan Murdoch bought 380.08k shares over the last 12 months at an average price of US$26.76. 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

Fox is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Fox Insiders Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Fox. We can see that Executive Chairman & CEO Lachlan Murdoch paid US$5.9m for shares in the company. On the other hand, insiders netted US$4.4m by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership of Fox

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Fox insiders own about US$181m worth of shares (which is 1.2% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Fox Tell Us?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Fox insiders are well aligned, and quite possibly think the share price is too low. Nice! 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. For example - Fox has 4 warning signs we think you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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. 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.

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