It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell The PNC Financial Services Group, Inc. (NYSE:PNC), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
PNC Financial Services Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Executive VP and Head of Technology & Innovation Steven Van Wyk sold US$2.1m worth of shares at a price of US$141 per share. So we know that an insider sold shares at around the present share price of US$119. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
Over the last year we saw more insider selling of PNC Financial Services Group shares, than buying. They sold for an average price of about US$139. We don’t gain much confidence from insider selling near the recent share price. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at PNC Financial Services Group Have Sold Stock Recently
There was substantially more insider selling, than buying, of PNC Financial Services Group shares over the last three months. In total, Michael Hannon sold US$624k worth of shares in that time. On the other hand we note Martin Pfinsgraff bought US$63k worth of shares. 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.
Does PNC Financial Services Group Boast High Insider Ownership?
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. It’s great to see that PNC Financial Services Group insiders own 0.3% of the company, worth about US$157m. 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 PNC Financial Services Group Tell Us?
Unfortunately, there has been more insider selling of PNC Financial Services Group stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. But since PNC Financial Services Group 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. Of course, the future is what matters most. So if you are interested in PNC Financial Services Group, you should check out this free report on analyst forecasts for the company.
But note: PNC Financial Services Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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.