UK Markets open in 14 mins

As Wells Fargo & Company's (NYSE:WFC)) market cap dropped by US$13b, insiders who sold US$1.0m worth of stock were able to offset their losses

Insiders at Wells Fargo & Company (NYSE:WFC) sold US$1.0m worth of stock at an average price of US$44.44 a share over the past year, making the most of their investment. After the stock price dropped 8.0% last week, the company's market value declined by US$13b, but insiders were able to mitigate their losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Wells Fargo

Wells Fargo Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Kleber Santos, sold US$1.0m worth of shares at a price of US$44.44 per share. So we know that an insider sold shares at around the present share price of US$40.41. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). Kleber Santos was the only individual insider to sell shares in the last twelve months.

You can see a visual depiction of insider transactions (by companies and 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!

insider-trading-volume
insider-trading-volume

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).

Does Wells Fargo Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Wells Fargo insiders own 0.07% of the company, currently worth about US$113m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Wells Fargo Tell Us?

The fact that there have been no Wells Fargo insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Wells Fargo, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Wells Fargo that deserve your attention before buying any shares.

But note: Wells Fargo 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here