Yahoo Finance Insiders probably made the right decision selling US$9.6m worth of shares earlier this year as Visa Inc.'s (NYSE:V)) stock dips by 4.2%.
Insiders at Visa Inc. (NYSE:V) sold US$9.6m worth of stock at an average price of US$217 a share over the past year, making the most of their investment. The company’s market cap plunged by US$19b after price dropped by 4.2% last week but insiders were able to limit their loss to an extent.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Visa
Visa Insider Transactions Over The Last Year
In fact, the recent sale by Rajat Taneja was the biggest sale of Visa shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of US$208. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. 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.
Visa insiders didn't buy any shares 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders At Visa Have Sold Stock Recently
The last quarter saw substantial insider selling of Visa shares. In total, insiders dumped US$9.0m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership
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. It's great to see that Visa insiders own 0.05% of the company, worth about US$228m. 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 Visa Insider Transactions Indicate?
Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Visa is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Visa and understanding this should be part of your investment process.
Of course Visa 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, but not derivative transactions.
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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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