Chief Financial Officer Denis Coleman Sold A Bunch Of Shares In Goldman Sachs Group

We wouldn't blame The Goldman Sachs Group, Inc. (NYSE:GS) shareholders if they were a little worried about the fact that Denis Coleman, the Chief Financial Officer recently netted about US$7.7m selling shares at an average price of US$593. That sale reduced their total holding by 39% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for Goldman Sachs Group

The Last 12 Months Of Insider Transactions At Goldman Sachs Group

In fact, the recent sale by Denis Coleman was the biggest sale of Goldman Sachs Group shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at below the current price (US$602). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 39% of Denis Coleman's stake.

Over the last year we saw more insider selling of Goldman Sachs Group shares, than buying. The sellers received a price of around US$473, on average. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. 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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Insider Ownership Of Goldman Sachs Group

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Goldman Sachs Group insiders own 0.5% of the company, currently worth about US$929m 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 Goldman Sachs Group Insiders?

The stark truth for Goldman Sachs Group is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Goldman Sachs Group is growing earnings. 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. At Simply Wall St, we found 2 warning signs for Goldman Sachs Group 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.