Insiders At Hyatt Hotels Sold US$2.5m In Stock, Alluding To Potential Weakness

Many Hyatt Hotels Corporation (NYSE:H) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

We've discovered 4 warning signs about Hyatt Hotels. View them for free.

The Last 12 Months Of Insider Transactions At Hyatt Hotels

Over the last year, we can see that the biggest insider sale was by the Executive VP & Chief Commercial Officer, Mark Vondrasek, for US$1.2m worth of shares, at about US$117 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$137. 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. 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. This single sale was 52% of Mark Vondrasek's stake.

Hyatt Hotels insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Hyatt Hotels

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Hyatt Hotels Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Hyatt Hotels shares. In total, insiders sold US$1.3m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Hyatt Hotels Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Hyatt Hotels insiders own 11% of the company, currently worth about US$1.5b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Hyatt Hotels Tell Us?

Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Hyatt Hotels is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 4 warning signs we've spotted with Hyatt Hotels (including 2 which make us uncomfortable).

Of course Hyatt Hotels 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.