The fact that multiple The Charles Schwab Corporation (NYSE:SCHW) insiders selling a considerable amount of shares over the last year could have raised some eyebrows among investors. Knowing whether insiders are buying is often more useful when evaluating insider transactions, since insider selling can have several explanations. However, shareholders should take a deeper look if multiple insiders are selling shares during a specific period.
While insider transactions aren’t the most important thing when it comes to long-term investing, logic dictates that you should pay 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 largest insider sale was made by founder and co-chairman, Charles Schwab, for $10 million worth of shares, at about $76.40 per share. We generally don’t like to see insider selling, but the lower the sale price, the more it worries us. It is comforting to know that this sale was made at a price well above the current share price of $62.80. So this may not tell us anything about how insiders feel about the current share price.
Over the last year, we can see that insiders bought 35.83K shares worth US$2.3M. But insiders sold 788.74K shares worth US$57M. Over the past year, we have seen more insider sales of Charles Schwab stock than purchases. You can see below a visual representation of insider transactions (by companies and individuals) over the past 12 months. If you want to know exactly who sold, for how much and when, just click on the graph below!
I’ll like Charles Schwab better if I see some big insider buying. While we wait, check this out free list of undervalued and small-cap stocks with considerable, recent insider buying.
Charles Schwab Insiders Sold Shares Recently
Over the past three months, we have seen notably more insider selling than insider buying at Charles Schwab. We note that insiders profited from shares worth US$15m. On the other hand, we note that insiders purchased $2.3 million worth of shares. We do not view these transactions as a positive sign.
Does Charles Schwab have 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 the insiders. I think 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, which is currently worth about $1.6 billion based on the recent share price. I like to see this level of insider ownership because it increases the chances that management has shareholders’ best interests at heart.
So what do Charles Schwab’s internal transactions indicate?
The hard truth for Charles Schwab is that there have been more insider sales than insider purchases over the past three months. Despite some insider buying, the long-term outlook doesn’t make us feel much more positive. It’s good to see high insider ownership, but insider selling makes us cautious. In addition to knowing about ongoing internal transactions, it is beneficial to identify the risks facing Charles Schwab. While conducting our analysis, we discovered that Charles Schwab 1 warning sign and it would be unwise to ignore it.
Clear, you might find a fantastic investment by looking elsewhere. So take a look 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 only account for open market transactions and private dispositions of direct interests, but we do not account for derivative transactions or indirect interests.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your objectives or financial situation. Our goal is to bring you long-term focused analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St has no position in any of the stocks mentioned.
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