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Philip Morris International Inc. (NYSE:PM) insiders who sold US$16m worth of stock earlier this year are probably glad they did so as market cap slides to US$144b

By selling US$16m worth of Philip Morris International Inc. (NYSE:PM) stock at an average sell price of US$100 over the last year, insiders seemed to have made the most of their holdings. After the stock price dropped 3.8% last week, the company's market value declined by US$5.6b, but insiders were able to mitigate their losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Philip Morris International

The Last 12 Months Of Insider Transactions At Philip Morris International

Over the last year, we can see that the biggest insider sale was by the Executive Chairman of the Board, Andre Calantzopoulos, for US$8.0m worth of shares, at about US$100 per share. So we know that an insider sold shares at around the present share price of US$92.60. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Philip Morris International insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. 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

I will like Philip Morris International better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders At Philip Morris International Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Philip Morris International. Specifically, insiders ditched US$16m 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.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Philip Morris International insiders own 0.1% of the company, currently worth about US$206m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Philip Morris International Insider Transactions Indicate?

Insiders sold Philip Morris International shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Philip Morris International. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Philip Morris International.

But note: Philip Morris International 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.

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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