Don't Ignore The Insider Selling In Goldman Sachs Group

Some The Goldman Sachs Group, Inc. (NYSE:GS) shareholders may be a little concerned to see that the Chairman & CEO, David Solomon, recently sold a substantial US$4.7m worth of stock at a price of US$712 per share. However, that sale only accounted for 4.4% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At Goldman Sachs Group

The Independent Director, Thomas Montag, made the biggest insider sale in the last 12 months. That single transaction was for US$12m worth of shares at a price of US$601 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$724. 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. It is worth noting that this sale was only 10% of Thomas Montag's holding.

In the last twelve months insiders purchased 6.39k shares for US$3.5m. On the other hand they divested 99.76k shares, for US$61m. In total, Goldman Sachs Group insiders sold more than they bought 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 Goldman Sachs Group

I will like Goldman Sachs Group 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

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Goldman Sachs Group insiders own 0.6% of the company, currently worth about US$1.2b 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.

What Might The Insider Transactions At Goldman Sachs Group Tell Us?

Insiders sold Goldman Sachs Group shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Goldman Sachs Group makes money, and is growing profits. 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. 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. For example - Goldman Sachs Group has 2 warning signs we think you should be aware of.

But note: Goldman Sachs Group 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.