Insiders At Donnelley Financial Solutions Sold US$4.1m In Stock, Alluding To Potential Weakness

The fact that multiple Donnelley Financial Solutions, Inc. (NYSE:DFIN) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Donnelley Financial Solutions

Donnelley Financial Solutions Insider Transactions Over The Last Year

The President of Global Investment Companies, Eric Johnson, made the biggest insider sale in the last 12 months. That single transaction was for US$1.3m worth of shares at a price of US$59.25 each. That means that an insider was selling shares at slightly below the current price (US$66.34). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 19% of Eric Johnson's stake.

Donnelley Financial Solutions insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Donnelley Financial Solutions Insiders Are Selling The Stock

The last three months saw significant insider selling at Donnelley Financial Solutions. In total, insiders sold US$860k 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.

Does Donnelley Financial Solutions Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Donnelley Financial Solutions insiders own 3.8% of the company, worth about US$73m. 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?

Insiders sold Donnelley Financial Solutions shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Donnelley Financial Solutions is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. 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. At Simply Wall St, we found 1 warning sign for Donnelley Financial Solutions that deserve your attention before buying any shares.

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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.