The fact that multiple The Charles Schwab Corporation (NYSE:SCHW) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Charles Schwab
The Last 12 Months Of Insider Transactions At Charles Schwab
Over the last year, we can see that the biggest insider sale was by the Founder & Co-Chairman, Charles Schwab, for US$10m worth of shares, at about US$76.40 per share. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. It’s of some comfort that this sale was conducted at a price well above the current share price, which is US$62.80. So it may not tell us anything about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 35.83k shares worth US$2.3m. But insiders sold 788.74k shares worth US$57m. Over the last year we saw more insider selling of Charles Schwab shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Charles Schwab 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.
Insiders At Charles Schwab Have Sold Stock Recently
Over the last three months, we’ve seen notably more insider selling, than insider buying, at Charles Schwab. We note insiders cashed in US$15m worth of shares. On the other hand we note insiders bought US$2.3m worth of shares. We don’t view these transactions as a positive sign.
Does Charles Schwab Boast High 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. Charles Schwab insiders own 1.4% of the company, currently worth about US$1.6b 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?
The stark truth for Charles Schwab is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. 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. While conducting our analysis, we found that Charles Schwab has 1 warning sign and it would be unwise to ignore it.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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