We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Brown & Brown, Inc. (NYSE:BRO).
Do Insider Transactions Matter?
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 don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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 Brown & Brown
The Executive VP & President of Wholesale Brokerage Division, Anthony Strianese, made the biggest insider sale in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$29.17 each. That means that an insider was selling shares at slightly below the current price (US$36.50). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 10.9% of Anthony Strianese's holding.
Over the last year we saw more insider selling of Brown & Brown shares, than buying. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Brown & Brown Have Bought Stock Recently
Over the last quarter, Brown & Brown insiders have spent a meaningful amount on shares. Specifically, H. Proctor bought US$180k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Insider Ownership of Brown & Brown
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Brown & Brown insiders own about US$1.7b worth of shares (which is 17% of the company). 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 Brown & Brown Insider Transactions Indicate?
The recent insider purchase is heartening. But we can't say the same for the transactions over the last 12 months. The recent buying by an insider, along with high insider ownership, suggest that Brown & Brown insiders are fairly aligned, and optimistic. Of course, the future is what matters most. So if you are interested in Brown & Brown, you should check out this free report on analyst forecasts for the company.
Of course Brown & Brown may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.