Have CME Group Insiders Been Selling Stock?

Some CME Group Inc. (NASDAQ:CME) shareholders may be a little concerned to see that insider Julie Winkler recently sold a substantial US$2.9m worth of stock at a price of US$249 per share. That sale reduced their total holding by 35% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for CME Group

CME Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chairman & CEO, Terrence Duffy, sold US$8.4m worth of shares at a price of US$211 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$245. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 37% of Terrence Duffy's holding.

In the last twelve months insiders purchased 2.63k shares for US$584k. But they sold 86.57k shares for US$19m. Over the last year we saw more insider selling of CME Group 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that CME Group insiders own 0.3% of the company, worth about US$281m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At CME Group Tell Us?

Unfortunately, there has been more insider selling of CME Group stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since CME Group is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of 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. Case in point: We've spotted 2 warning signs for CME Group you should be aware of.

Of course CME Group 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.