Should You Be Worried About Insider Transactions At The Bank of New York Mellon Corporation (NYSE:BK)?
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 The Bank of New York Mellon Corporation (NYSE:BK).
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
View our latest analysis for Bank of New York Mellon
The Last 12 Months Of Insider Transactions At Bank of New York Mellon
In the last twelve months, the biggest single sale by an insider was when Senior EVP & CEO of Investment Management Mitchell Harris sold US$2.7m worth of shares at a price of US$56.02 per share. So we know that an insider sold shares at around the present share price of US$53.12. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.
Over the last year, we note insiders sold 100.84k shares worth US$5.6m. Over the last year we saw more insider selling of Bank of New York Mellon shares, than buying. They sold for an average price of about US$55.06. It’s not ideal to see that insiders have sold at around the current price. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Bank of New York Mellon Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at Bank of New York Mellon. Specifically, insiders ditched US$1.8m 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.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It’s great to see that Bank of New York Mellon insiders own 0.2% of the company, worth about US$103m. 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 Do The Bank of New York Mellon Insider Transactions Indicate?
Insiders haven’t bought Bank of New York Mellon stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. On the plus side, Bank of New York Mellon makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. Of course, the future is what matters most. So if you are interested in Bank of New York Mellon, you should check out this free report on analyst forecasts for the company.
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