BHP Group Insiders Sell US$21m Of Stock, Possibly Signalling Caution

Many BHP Group Limited (ASX:BHP) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. 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 we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for BHP Group

BHP Group Insider Transactions Over The Last Year

The CEO & Executive Director, Mike Henry, made the biggest insider sale in the last 12 months. That single transaction was for AU$19m worth of shares at a price of AU$47.55 each. So what is clear is that an insider saw fit to sell at around the current price of AU$46.04. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Over the last year we saw more insider selling of BHP Group shares, than buying. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

BHP Group Insiders Bought Stock Recently

We saw some BHP Group insider buying shares in the last three months. Independent Non-Executive Director Michelle Hinchliffe purchased AU$70k worth of shares in that period. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

Insider Ownership Of BHP Group

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.02% of BHP Group shares, worth about AU$55m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At BHP Group Tell Us?

The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. The more recent transactions are a positive, but BHP Group insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. So they seem pretty well aligned, overall. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - BHP Group has 3 warning signs we think you should be aware of.

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 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.