As Franklin Resources, Inc.'s (NYSE:BEN)) market cap dropped by US$783m, insiders who sold US$4.9m worth of stock were able to offset their losses

By
Simply Wall St
Published
February 23, 2022
NYSE:BEN
Source: Shutterstock

Insiders at Franklin Resources, Inc. (NYSE:BEN) sold US$4.9m worth of stock at an average price of US$30.60 a share over the past year, making the most of their investment. The company's market worth decreased by US$783m over the past week after the stock price dropped 5.0%, although insiders were able to minimize their losses

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.

Check out our latest analysis for Franklin Resources

Franklin Resources Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the President, Jennifer Johnson, for US$1.6m worth of shares, at about US$30.37 per share. That means that an insider was selling shares at around the current price of US$29.51. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

In the last year Franklin Resources insiders didn't buy any company stock. 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!

insider-trading-volume
NYSE:BEN Insider Trading Volume February 23rd 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of Franklin Resources

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Franklin Resources insiders own 43% of the company, currently worth about US$6.4b based on the recent share price. 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 Does This Data Suggest About Franklin Resources Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Franklin Resources insiders selling. 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. While conducting our analysis, we found that Franklin Resources has 1 warning sign and it would be unwise to ignore it.

Of course Franklin Resources 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, but not derivative transactions.

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