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While it’s been a great week for Chubb Limited (NYSE:CB) shareholders after stock gained 3.6%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell US$37m worth of stock in the past 12 months. This could be a sign of impending weakness.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Chubb
The Last 12 Months Of Insider Transactions At Chubb
Over the last year, we can see that the biggest insider sale was by the Executive Chairman & CEO, Evan Greenberg, for US$13m worth of shares, at about US$210 per share. That means that even when the share price was below the current price of US$220, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 7.9% of Evan Greenberg's holding.
In the last year Chubb insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Chubb Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Chubb. In total, insiders sold US$11m 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
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Chubb insiders own 0.5% of the company, worth about US$428m. 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 Do The Chubb Insider Transactions Indicate?
Insiders haven't bought Chubb stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Chubb.