Berkshire Hathaway Insiders Sold US$140m Of Shares Suggesting Hesitancy

Over the past year, many Berkshire Hathaway Inc. (NYSE:BRK.A) insiders sold a significant stake in the company which may have piqued investors' interest. 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, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Berkshire Hathaway

Over the last year, we can see that the biggest insider sale was by the Vice Chairman of Insurance Operations & Director, Ajit Jain, for US$139m worth of shares, at about US$695,418 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$784,000. 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. We note that the biggest single sale was 63% of Ajit Jain's holding.

Berkshire Hathaway insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for Berkshire Hathaway

I will like Berkshire Hathaway 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.

Insider Ownership Of Berkshire Hathaway

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. Berkshire Hathaway insiders own about US$166b worth of shares (which is 15% of the company). 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 Berkshire Hathaway Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Berkshire Hathaway shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Berkshire Hathaway insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Berkshire Hathaway has 1 warning sign and it would be unwise to ignore it.

But note: Berkshire Hathaway may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.