President of Process Automation Of ABB Sold 40% Of Their Shares

We wouldn't blame ABB Ltd (VTX:ABBN) shareholders if they were a little worried about the fact that Peter Terwiesch, the President of Process Automation recently netted about CHF1.1m selling shares at an average price of CHF45.97. That's a big disposal, and it decreased their holding size by 40%, which is notable but not too bad.

View our latest analysis for ABB

ABB Insider Transactions Over The Last Year

Notably, that recent sale by President of Process Automation Peter Terwiesch was not the only time they sold ABB shares this year. They previously made an even bigger sale of -CHF1.7m worth of shares at a price of CHF44.78 per share. That means that even when the share price was slightly below the current price of CHF45.23, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 37% of Peter Terwiesch's stake.

ABB insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership Of ABB

Many investors like to check how much of a company is owned by insiders. 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 0.1% of ABB shares, worth about CHF83m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About ABB Insiders?

An insider hasn't bought ABB stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But since ABB is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ABB. Every company has risks, and we've spotted 1 warning sign for ABB you should know about.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.