Don't Ignore The Insider Selling In BlackRock

Some BlackRock, Inc. (NYSE:BLK) shareholders may be a little concerned to see that the Chairman & CEO, Laurence Fink, recently sold a substantial US$25m worth of stock at a price of US$843 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 7.9%.

Check out our latest analysis for BlackRock

The Last 12 Months Of Insider Transactions At BlackRock

In fact, the recent sale by Chairman & CEO Laurence Fink was not their only sale of BlackRock shares this year. Earlier in the year, they fetched US$813 per share in a -US$25m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$856. 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 7.0% of Laurence Fink's holding.

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

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

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. It's great to see that BlackRock insiders own 0.9% of the company, worth about US$1.2b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The BlackRock Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. On the plus side, BlackRock 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. 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. For example - BlackRock has 1 warning sign we think you should be aware of.

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.