Yahoo Finance Have Insiders Been Selling The Charles Schwab Corporation (NYSE:SCHW) Shares?
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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell The Charles Schwab Corporation (NYSE:SCHW), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
View our latest analysis for Charles Schwab
Charles Schwab Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Chairman of the Board Charles Schwab for US$25m worth of shares, at about US$57.01 per share. That is hardly a positive sign, even though it took place above the latest price (US$44.13). So it may not shed much light on insider confidence at current levels.
Over the last year, we note insiders sold 2.54m shares worth US$138m. In total, Charles Schwab insiders sold more than they bought over the last year. They sold for an average price of about US$54.21. It is certainly not great to see that insiders have sold shares in the company. But we note that the selling, on average, was at well above the recently traded price of US$44.13. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Charles Schwab Have Sold Stock Recently
The last three months saw significant insider selling at Charles Schwab. In total, Charles Schwab sold US$12m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Charles Schwab insiders own 7.5% of the company, worth about US$4.4b. 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 Does This Data Suggest About Charles Schwab Insiders?
An insider sold Charles Schwab shares recently, but they didn't buy any. And even if we look to the last year, we didn't see any purchases. But it is good to see that Charles Schwab is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in Charles Schwab, you should check out this free report on analyst forecasts for the company.
But note: Charles Schwab may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
