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Costco Wholesale Corporation (NASDAQ:COST) insiders sold US$23m worth of stock, possibly signalling a downtrend

Many Costco Wholesale Corporation (NASDAQ:COST) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Costco Wholesale

The Last 12 Months Of Insider Transactions At Costco Wholesale

The Executive VP & COO of International Division, James Murphy, made the biggest insider sale in the last 12 months. That single transaction was for US$2.8m worth of shares at a price of US$559 each. So we know that an insider sold shares at around the present share price of US$531. 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.

Over the last year we saw more insider selling of Costco Wholesale shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Costco Wholesale Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Costco Wholesale. Specifically, insiders ditched US$3.1m 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.

Does Costco Wholesale Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Costco Wholesale insiders own 0.2% of the company, currently worth about US$587m 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.

So What Do The Costco Wholesale Insider Transactions Indicate?

Insiders haven't bought Costco Wholesale stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Costco Wholesale makes money, and is growing profits. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Costco Wholesale. At Simply Wall St, we found 1 warning sign for Costco Wholesale that deserve your attention before buying any shares.

Of course Costco Wholesale 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.

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.

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