This Insider Has Just Sold Shares In Walmart

We wouldn't blame Walmart Inc. (NYSE:WMT) shareholders if they were a little worried about the fact that C. McMillon, the President recently netted about US$1.6m selling shares at an average price of US$161. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 0.6%.

View our latest analysis for Walmart

The Last 12 Months Of Insider Transactions At Walmart

In the last twelve months, the biggest single sale by an insider was when the Executive VP of Global Governance, Rachel Brand, sold US$2.6m worth of shares at a price of US$157 per share. That means that an insider was selling shares at slightly below the current price (US$164). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 9.2% of Rachel Brand's holding.

Over the last year we saw more insider selling of Walmart 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!

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Insider Ownership Of Walmart

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Walmart insiders own about US$3.9b worth of shares (which is 0.9% of the company). 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 Do The Walmart Insider Transactions Indicate?

Insiders sold Walmart shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Walmart makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. 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 - Walmart has 2 warning signs we think you should be aware of.

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.

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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.