Wells Fargo & Company's (NYSE:WFC) stock dropped 3.2% this week, offering solace to those who sold earlier in the year
Despite the fact that Wells Fargo & Company's (NYSE:WFC) value has dropped 3.2% in the last week insiders who sold US$1.0m worth of stock in the past 12 months have had less success. Given that the average selling price of US$44.44 is still lower than the current share price, insiders would probably have been better off keeping their shares.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Wells Fargo
The Last 12 Months Of Insider Transactions At Wells Fargo
Over the last year, we can see that the biggest insider sale was by the insider, Kleber Santos, for US$1.0m worth of shares, at about US$44.44 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$45.94. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. It is worth noting that this sale was 51% of Kleber Santos's holding. Kleber Santos 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. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Wells Fargo Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Wells Fargo insiders own 0.06% of the company, currently worth about US$103m 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 Does This Data Suggest About Wells Fargo Insiders?
The fact that there have been no Wells Fargo insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Wells Fargo, we can't say the same about the selling of shares. 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. At Simply Wall St, we found 1 warning sign for Wells Fargo that deserve your attention before buying any shares.
Of course Wells Fargo 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.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
