Insiders At Bank of New York Mellon Sold US$10m In Stock, Alluding To Potential Weakness

In the last year, many The Bank of New York Mellon Corporation (NYSE:BK) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Bank of New York Mellon

Bank of New York Mellon Insider Transactions Over The Last Year

The Senior Executive VP & Global Head of Wealth, Catherine Keating, made the biggest insider sale in the last 12 months. That single transaction was for US$3.0m worth of shares at a price of US$54.88 each. That means that even when the share price was below the current price of US$66.41, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 77% of Catherine Keating's holding.

Bank of New York Mellon insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Bank of New York Mellon better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Bank of New York Mellon Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Bank of New York Mellon. In total, insider Hanneke Smits sold US$962k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that Bank of New York Mellon insiders own 0.2% of the company, worth about US$81m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Bank of New York Mellon Insiders?

An insider sold Bank of New York Mellon shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. On the plus side, Bank of New York Mellon makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.