Possible Bearish Signals With Berkshire Hathaway Insiders Disposing Stock

Many Berkshire Hathaway Inc. (NYSE:BRK.A) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Berkshire Hathaway

The Last 12 Months Of Insider Transactions At Berkshire Hathaway

The Vice Chairman of Insurance Operations & Director, Ajit Jain, made the biggest insider sale in the last 12 months. That single transaction was for US$139m worth of shares at a price of US$695,418 each. So what is clear is that an insider saw fit to sell at around the current price of US$678,560. 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 Berkshire Hathaway insiders didn't buy any company stock. 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!

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Berkshire Hathaway Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Berkshire Hathaway. In total, Independent Director Charlotte Guyman sold US$678k 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 Of Berkshire Hathaway

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Berkshire Hathaway insiders own 15% of the company, currently worth about US$143b 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 Berkshire Hathaway Insiders?

An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But since Berkshire Hathaway is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. You'd be interested to know, that we found 1 warning sign for Berkshire Hathaway and we suggest you have a look.

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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.