Some Northern Trust Corporation (NASDAQ:NTRS) shareholders may be a little concerned to see that insider Joyce Clair recently sold a whopping US$815k worth of stock at a price of US$101 per share. That sale reduced their total holding by 14% which is hardly insignificant, but far from the worst we've seen.
The Last 12 Months Of Insider Transactions At Northern Trust
In the last twelve months, the biggest single sale by an insider was when the Executive VP & Chief Investment Officer, Robert Browne, sold US$1.2m worth of shares at a price of US$99.60 per share. That means that even when the share price was slightly below the current price of US$101, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 33% of Robert Browne's stake.
Over the last year, we note insiders sold 33411.33 shares worth US$3.2m. Northern Trust insiders didn't buy any shares over the last year. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Does Northern Trust Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Northern Trust insiders own about US$292m worth of shares (which is 1.4% of the company). 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 Northern Trust Insider Transactions Indicate?
Insiders sold stock recently, but they haven't been buying. And even if we look to the last year, we didn't see any purchases. On the plus side, Northern Trust makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Northern Trust.
But note: Northern Trust 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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