Over the past year, insiders sold US$2.5m worth of United Parcel Service, Inc. (NYSE:UPS) stock at an average price of US$192 per share allowing them to get the most out of their money. The company's market worth decreased by US$11b over the past week after the stock price dropped 7.0%, although insiders were able to minimize their losses
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At United Parcel Service
The Executive VP & Chief Marketing Officer, Kevin Warren, made the biggest insider sale in the last 12 months. That single transaction was for US$2.5m worth of shares at a price of US$192 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$164. So it is hard to draw any strong conclusion from it. Kevin Warren was the only individual insider to sell shares in the last twelve months.
You can see a visual depiction of insider transactions (by companies and 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 like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
United Parcel Service Insiders Are Selling The Stock
The last three months saw significant insider selling at United Parcel Service. In total, Executive VP & Chief Marketing Officer Kevin Warren sold US$2.5m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Does United Parcel Service Boast High 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. We usually like to see fairly high levels of insider ownership. United Parcel Service insiders own 0.08% of the company, currently worth about US$113m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About United Parcel Service Insiders?
An insider sold United Parcel Service shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since United Parcel Service is profitable and growing, we're not too worried by this. 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. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with United Parcel Service and understanding these should be part of your investment process.
But note: United Parcel Service 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.
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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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