It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Raymond James Financial, Inc. (NYSE:RJF).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 Raymond James Financial
Over the last year, we can see that the biggest insider sale was by Financial Advisor of Local Branch Dennis Zank for US$2.0m worth of shares, at about US$98.63 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$73.59. So it is hard to draw any strong conclusion from it.
Over the last year we saw more insider selling of Raymond James Financial shares, than buying. They sold for an average price of about US$94.52. It’s not particularly great to see insiders were selling shares around current prices (shares recently traded around US$73.59). While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Raymond James Financial Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of Raymond James Financial shares over the last three months. In total, George Catanese sold US$520k worth of shares in that time. On the flip side, Tashtego Elwyn spent US$111k on purchasing shares (as mentioned above). The share price has moved a bit recently, but it’s hard to argue that the selling is a positive.
Does Raymond James Financial Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Raymond James Financial insiders own 11% of the company, currently worth about US$1.1b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Raymond James Financial Insider Transactions Indicate?
Unfortunately, there has been more insider selling of Raymond James Financial stock, than buying, in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. But it is good to see that Raymond James Financial is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Raymond James Financial may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.