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 shareholders might well want to know whether insiders have been buying or selling shares in United Parcel Service, Inc. (NYSE:UPS).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At United Parcel Service
Over the last year, we can see that the biggest insider sale was by George Willis for US$523k worth of shares, at about US$121 per share. That means that an insider was selling shares at around the current price of US$110. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price. George Willis was the only individual insider to sell shares in the last twelve months.
You can see a visual depiction of insider transactions (by 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. United Parcel Service insiders own about US$85m worth of shares. That equates to 0.09% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About United Parcel Service Insiders?
It doesn’t really mean much that no insider has traded United Parcel Service shares in the last quarter. Still, the insider transactions at United Parcel Service in the last 12 months are not very heartening. But it’s good to see that insiders own shares in the company. Of course, the future is what matters most. So if you are interested in United Parcel Service, you should check out this free report on analyst forecasts for the company.
Of course United Parcel Service may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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