Possible Bearish Signals With Brookfield Asset Management Insiders Disposing Stock

In the last year, many Brookfield Asset Management Ltd. (TSE:BAM) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. 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, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Brookfield Asset Management

Brookfield Asset Management Insider Transactions Over The Last Year

The CEO & Director, James Flatt, made the biggest insider sale in the last 12 months. That single transaction was for CA$11m worth of shares at a price of CA$54.82 each. That means that an insider was selling shares at around the current price of CA$53.78. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. 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 Brookfield Asset Management shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Brookfield Asset Management better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Brookfield Asset Management Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of Brookfield Asset Management shares over the last three months. In total, insiders sold CA$12m worth of shares in that time. On the other hand we note Managing Partner Samuel J. Pollock bought CA$6.0m worth of shares , as previously mentioned . Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.

Insider Ownership Of Brookfield Asset Management

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. Brookfield Asset Management insiders own 7.4% of the company, currently worth about CA$1.6b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Brookfield Asset Management Insiders?

Unfortunately, there has been more insider selling of Brookfield Asset Management stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since Brookfield Asset Management is profitable and growing, we're not too worried by this. 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. Case in point: We've spotted 2 warning signs for Brookfield Asset Management you should be aware of.

Of course Brookfield Asset Management may not be the best stock to buy. So you may wish to see this free collection of high quality 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 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.