The TJX Companies, Inc. (NYSE:TJX) insiders sold US$23m worth of stock last year which shareholders may not want to overlook
While it’s been a great week for The TJX Companies, Inc. (NYSE:TJX) shareholders after stock gained 3.9%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell US$23m worth of stock in the past 12 months. This could be a sign of impending weakness.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for TJX Companies
The Last 12 Months Of Insider Transactions At TJX Companies
The Executive Chairman, Carol Meyrowitz, made the biggest insider sale in the last 12 months. That single transaction was for US$4.8m worth of shares at a price of US$67.62 each. That means that an insider was selling shares at slightly below the current price (US$74.00). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 21% of Carol Meyrowitz's holding.
In total, TJX Companies insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insiders At TJX Companies Have Sold Stock Recently
The last three months saw significant insider selling at TJX Companies. In total, insiders sold US$12m 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 Of TJX Companies
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. TJX Companies insiders own about US$148m worth of shares (which is 0.2% 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 TJX Companies Insider Transactions Indicate?
Insiders haven't bought TJX Companies stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But since TJX Companies is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Be aware that TJX Companies is showing 3 warning signs in our investment analysis, and 1 of those is potentially serious...
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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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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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