We wouldn’t blame Chubb Limited (NYSE:CB) shareholders if they were a little worried about the fact that John Lupica, the Vice Chairman and President of North America Major Accounts & Specialty Insurance recently netted about US$949k selling shares at an average price of US$158. However, it’s crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 2.9%.
Chubb Insider Transactions Over The Last Year
The Chairman & CEO, Evan Greenberg, made the biggest insider sale in the last 12 months. That single transaction was for US$32m worth of shares at a price of US$149 each. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$155. 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. However, while insider selling is sometimes discouraging, it’s only a weak signal. We note that the biggest single sale was only 14.5% of Evan Greenberg’s holding.
We note that in the last year insiders divested 410k shares for a total of US$60m. In the last year Chubb insiders didn’t buy any company stock. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. Chubb insiders own about US$464m worth of shares (which is 0.7% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Chubb Tell Us?
Insiders sold Chubb shares recently, but they didn’t buy any. And there weren’t any purchases to give us comfort, over the last year. It is good to see high insider ownership, but the insider selling leaves us cautious. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Chubb.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.