Insiders At Charles Schwab Sold US$59m In Stock, Alluding To Potential Weakness

editorial-team@simplywallst.com (Simply Wall St)

Sun, May 18, 2025, 7:00 AM 3 min read

The fact that multiple The Charles Schwab Corporation (NYSE:SCHW) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

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.

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The Last 12 Months Of Insider Transactions At Charles Schwab

In fact, the recent sale by Founder & Co-Chairman Charles Schwab was not their only sale of Charles Schwab shares this year. They previously made an even bigger sale of -US$11m worth of shares at a price of US$81.96 per share. That means that even when the share price was below the current price of US$88.69, an insider wanted to cash in some shares. 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. We note that the biggest single sale was only 0.6% of Charles Schwab's holding.

Happily, we note that in the last year insiders paid US$2.3m for 35.00k shares. On the other hand they divested 729.00k shares, for US$59m. Over the last year we saw more insider selling of Charles Schwab shares, than buying. 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!

See our latest analysis for Charles Schwab

insider-trading-volume — NYSE:SCHW Insider Trading Volume May 18th 2025

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Insiders At Charles Schwab Have Sold Stock Recently

The last three months saw significant insider selling at Charles Schwab. In total, insiders dumped US$40m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Charles Schwab insiders own 1.4% of the company, worth about US$2.2b. 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 Does This Data Suggest About Charles Schwab Insiders?

Insiders sold Charles Schwab shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Charles Schwab is growing earnings. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Charles Schwab. Case in point: We've spotted 1 warning sign for Charles Schwab you should be aware of.

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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 of direct interests only, but not derivative transactions or indirect interests.

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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.