Last week, Bank of America Corporation's (NYSE:BAC) stock jumped 5.4%, but insiders who sold US$11m worth of stock in over the past year are likely to be in a better position. Selling at an average price of US$35.37, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Bank of America Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the President of Global Corporate & Investment Banking, Matthew Koder, sold US$7.7m worth of shares at a price of US$35.91 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$28.60. So it may not tell us anything about how insiders feel about the current share price. Matthew Koder was the only individual insider to sell shares in the last twelve months.
Matthew Koder sold a total of 319.80k shares over the year at an average price of US$35.37. 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 like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders At Bank of America Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Bank of America. Specifically, President of Global Corporate & Investment Banking Matthew Koder ditched US$11m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership Of Bank of America
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Bank of America insiders own 0.2% of the company, currently worth about US$427m 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 Does This Data Suggest About Bank of America Insiders?
An insider sold Bank of America shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that Bank of America has 2 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.
But note: Bank of America 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.
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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