Donnelley Financial Solutions Insiders Sold US$3.8m Of Shares Suggesting Hesitancy \

Many Donnelley Financial Solutions, Inc. (NYSE:DFIN) 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, if numerous insiders are selling, shareholders should investigate more.

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.

Check out our latest analysis for Donnelley Financial Solutions

The Last 12 Months Of Insider Transactions At Donnelley Financial Solutions

The Executive VP & CFO, David Gardella, made the biggest insider sale in the last 12 months. That single transaction was for US$3.1m worth of shares at a price of US$42.17 each. That means that an insider was selling shares at slightly below the current price (US$45.92). 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. 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. This single sale was 53% of David Gardella's stake.

Insiders in Donnelley Financial Solutions didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders At Donnelley Financial Solutions Have Sold Stock Recently

The last quarter saw substantial insider selling of Donnelley Financial Solutions shares. In total, Executive VP Jennifer Reiners dumped US$543k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Donnelley Financial Solutions insiders own 3.7% of the company, worth about US$50m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Donnelley Financial Solutions Insider Transactions Indicate?

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. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 2 warning signs for Donnelley Financial Solutions you should be aware of.

But note: Donnelley Financial Solutions 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, but not derivative transactions.

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