In the last year, many The Charles Schwab Corporation (NYSE:SCHW) insiders sold a substantial stake in the company which may have sparked shareholders’ attention. 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.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Charles Schwab
The Last 12 Months Of Insider Transactions At Charles Schwab
In the last twelve months, the biggest single sale by an insider was when the Founder & Co-Chairman, Charles Schwab, sold US$10m worth of shares at a price of US$76.40 per share. So what is clear is that an insider saw fit to sell at around the current price of US$74.13. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn’t a major concern, though it’s hardly a good sign.
All up, insiders sold more shares in Charles Schwab 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. By clicking on the graph below, you can see the precise details of each insider transaction!
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Charles Schwab Insiders Are Selling The Stock
The last three months saw significant insider selling at Charles Schwab. In total, insiders sold US$45m worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership Of Charles Schwab
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. Charles Schwab insiders own 1.4% of the company, currently worth about US$1.9b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Charles Schwab Insider Transactions Indicate?
Insiders haven’t bought Charles Schwab stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn’t bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Charles Schwab. You’d be interested to know, that we found 1 warning sign for Charles Schwab and we suggest you have a look.
Of course Charles Schwab 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.
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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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