Some Thomson Reuters Corporation (TSE:TRI) shareholders may be a little concerned to see that the Executive VP & CFO, Stephane Bello, recently sold a whopping US$10m worth of stock at a price of US$88.12 per share. That sale reduced their total holding by 49% which is hardly insignificant, but far from the worst we've seen.
Thomson Reuters Insider Transactions Over The Last Year
In fact, the recent sale by Stephane Bello was the biggest sale of Thomson Reuters shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at below the current price (CA$89.01). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 49% of Stephane Bello's stake.
In the last twelve months insiders purchased 43669 shares for CA$2.6m. On the other hand they divested 287253.24 shares, for CA$23m. All up, insiders sold more shares in Thomson Reuters than they bought, over the last year. The average sell price was around US$79.06. We don't gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Thomson Reuters insiders own about CA$151m worth of shares (which is 0.3% of the company). 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 Thomson Reuters Insider Transactions Indicate?
An insider hasn't bought Thomson Reuters stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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, but not derivative transactions.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.