It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Prudential Financial, Inc. (NYSE:PRU).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Prudential Financial Insider Transactions Over The Last Year
For example, one insider made a large open-market sale in the last 12 months. That single transaction was for US$1.2m worth of shares at a price of US$95.25 each. That means that an insider was selling shares at around the current price of US$93.00. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
In the last twelve months insiders purchased 13830 shares for US$1.2m. But they sold 19532 for US$1.9m. Over the last year we saw more insider selling of Prudential Financial shares, than buying. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Prudential Financial Insiders Bought Stock Recently
Over the last quarter, Prudential Financial insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$1.1m worth of shares. This makes one think the business has some good points.
Insider Ownership of Prudential Financial
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Prudential Financial insiders own 0.3% of the company, worth about US$101m. 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 Prudential Financial Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. However, the longer term transactions are not so encouraging. The recent buying by some insiders , along with high insider ownership, suggest that Prudential Financial insiders are fairly aligned, and optimistic. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Prudential Financial.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.