U.S. Markets close in 3 hrs 5 mins

Should You Be Worried About Insider Transactions At The Bank of New York Mellon Corporation (NYSE:BK)?

Simply Wall St

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at 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, 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.'

View our latest analysis for Bank of New York Mellon

Bank of New York Mellon Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Jane McCarthy, for US$1.2m worth of shares, at about US$49.43 per share. 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$41.02. So it may not shed much light on insider confidence at current levels.

Over the last year we saw more insider selling of Bank of New York Mellon shares, than buying. 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!

NYSE:BK Recent Insider Trading, August 26th 2019

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 Bank of New York Mellon Have Bought Stock Recently

It's good to see that Bank of New York Mellon insiders have made notable investments in the company's shares. We can see that William Daley paid US$510k for shares in the company. No-one sold. That shows some optimism about the company's future.

Does Bank of New York Mellon Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Bank of New York Mellon insiders own 0.2% of the company, worth about US$76m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Bank of New York Mellon Tell Us?

It's certainly positive to see the recent insider purchase. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in Bank of New York Mellon, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. 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.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.