FCN

Why FTI Consulting ($FCN) CEO Bought $1.13M While Other Executives Sold

10/27/2025 11:33

FTI Consulting's ($FCN) CEO Steven Gunby sent a strong confidence signal by purchasing $1.13 million worth of company shares on October 24, creating a stark contrast with other executives who have been consistently selling their stakes throughout the year. FTI Consulting is a global consulting firm specializing in corporate restructuring, litigation support, and risk management, with a market capitalization of $4.87 billion. The company plays a crucial role during corporate crises, with demand typically surging during periods of increased regulatory investigations or legal disputes. Gunby's purchase is noteworthy from multiple angles. He bought 7,500 shares at $151.12 per share through a pre-planned 10b5-1 program. Interestingly, other executives have been moving in the opposite direction throughout the same period. In May, CFO Ajay Sabherwal sold approximately $860,000 worth of shares, while officer Curtis Lu disposed of about $785,000 worth in June. Similar selling activity occurred in 2024, including CHRO Holly Paul and several other executives. This divergent behavior among executives suggests subtle differences in internal perspectives. Notably, CFO Sabherwal resigned in September following his share sale, with Paul Linton being appointed as interim CFO. The stock price trajectory makes the CEO's decision appear even more bold. FCN peaked around $230 in July 2024 before entering a sustained decline. After a sharp drop in late October, the stock fell below $200 and has struggled to recover, currently trading in the mid-$160s, representing roughly a 30% decline from its highs. Market concerns are clear. In April, Truist downgraded FCN from 'buy' to 'hold' with a $178 price target, citing potential decreased demand for regulatory services under the Trump administration and consultant attrition risks. The Forensic & Litigation Consulting segment, which accounts for 20% of total revenue, faces particular scrutiny. Despite these concerns, recent financial performance has been solid. The company reported third-quarter revenue of $956.2 million in October and provided annual EPS guidance of $7.62-8.12, suggesting a different narrative from market worries. The timing of the CEO's purchase appears strategic. He bought at $151, close to current price levels, potentially indicating significant undervaluation if his assessment proves correct. Investors should focus on how political environmental changes actually impact the business. While Trump administration deregulation might reduce legal consulting demand, it could simultaneously increase M&A activity and corporate restructuring needs. Additionally, global geopolitical tensions might actually boost demand for risk management consulting. The CEO's substantial purchase represents more than simple stock price support—it signals confidence in the company's long-term prospects. While other executives' sales might reflect personal financial planning, the CEO's contrarian bet carries significant weight. Investment approach to FCN requires caution at current levels. Short-term political uncertainty and industry outlook concerns may continue pressuring the stock. However, considering the CEO's strong confidence signal and solid financial performance, current levels merit serious consideration for purchase. Particularly, FTI's services tend to become essential during economic downturns or corporate crises, offering defensive investment characteristics.