We wouldn't blame Federal Signal Corporation (NYSE:FSS) shareholders if they were a little worried about the fact that Brenda Reichelderfer, the Lead Independent Director & Independent Chairman recently netted about US$795k selling shares at an average price of US$131. That sale reduced their total holding by 12% which is hardly insignificant, but far from the worst we've seen.

The Last 12 Months Of Insider Transactions At Federal Signal

Notably, that recent sale by Brenda Reichelderfer is the biggest insider sale of Federal Signal shares that we've seen in the last year. So we know that an insider sold shares at around the present share price of US$128. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

In total, Federal Signal insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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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. I reckon it's a good sign if insiders own a significant number of shares in the company. Federal Signal insiders own 2.5% of the company, currently worth about US$194m 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.

So What Do The Federal Signal Insider Transactions Indicate?

Insiders haven't bought Federal Signal stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Federal Signal is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Federal Signal. For example - Federal Signal has 1 warning sign we think you should be aware of.

Of course Federal Signal may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.

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.