On September 19, 2023, Joseph Wayland, the Executive Vice President of Chubb Ltd (NYSE:CB), sold 11,537 shares of the company. This move is part of a trend observed over the past year, where the insider has sold a total of 11,537 shares and purchased none.
Chubb Ltd is a renowned insurance company, providing commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance, and life insurance to a diverse group of clients. The company is known for its extensive product and service offerings and broad distribution capabilities.
The insider's recent sell-off has raised eyebrows among investors and market watchers. Over the past year, there have been 13 insider sells and no insider buys at Chubb Ltd. This trend is illustrated in the following image:
The insider's sell-off comes at a time when Chubb Ltd's shares were trading at $213.67, giving the company a market cap of $87.81 billion. The stock's price-earnings ratio stands at 15.36, higher than the industry median of 12.54 and the companys historical median price-earnings ratio. This suggests that the stock is currently trading at a premium compared to its peers and its own historical standards.
However, when we look at the price-to-GF-Value ratio, which stands at 0.88, it indicates that the stock is modestly undervalued. The GF Value is an intrinsic value estimate developed by GuruFocus, calculated based on historical multiples, a GuruFocus adjustment factor, and future estimates of business performance. The GF Value for Chubb Ltd is $242.43, as shown in the image below:
The insider's decision to sell shares could be influenced by a variety of factors. It could be a personal financial decision or a strategic move based on the insider's assessment of the company's future prospects. However, it's important to note that insider selling does not necessarily indicate a negative outlook for the company. Investors should consider other factors such as the company's financial health, market conditions, and industry trends before making investment decisions.
In conclusion, while the insider's sell-off might raise some concerns, the valuation metrics suggest that Chubb Ltd's stock is modestly undervalued. Therefore, investors might want to keep a close eye on this stock.
This article first appeared on GuruFocus.