Have American Express Insiders Been Selling Stock?

We wouldn't blame American Express Company (NYSE:AXP) shareholders if they were a little worried about the fact that Stephen Squeri, the Chairman & CEO recently netted about US$9.3m selling shares at an average price of US$239. That's a big disposal, and it decreased their holding size by 17%, which is notable but not too bad.

See our latest analysis for American Express

American Express Insider Transactions Over The Last Year

In fact, the recent sale by Chairman & CEO Stephen Squeri was not their only sale of American Express shares this year. Earlier in the year, they fetched US$214 per share in a -US$15m sale. That means that an insider was selling shares at slightly below the current price (US$236). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 23% of Stephen Squeri's holding.

Over the last year we saw more insider selling of American Express 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!

I will like American Express better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. American Express insiders own about US$223m worth of shares (which is 0.1% 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 American Express Insider Transactions Indicate?

Insiders haven't bought American Express stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, American Express makes money, and is growing profits. 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. In terms of investment risks, we've identified 1 warning sign with American Express and understanding it should be part of your investment process.

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.