Don't Ignore The Insider Selling In Charles Schwab

We wouldn't blame The Charles Schwab Corporation (NYSE:SCHW) shareholders if they were a little worried about the fact that Carolyn Schwab-Pomerantz, the Director recently netted about US$1.5m selling shares at an average price of US$72.14. However, that sale only accounted for 0.9% of their holding, so arguably it doesn't say much about their conviction.

See our latest analysis for Charles Schwab

The Last 12 Months Of Insider Transactions At Charles Schwab

In the last twelve months, the biggest single sale by an insider was when the Founder & Co-Chairman, Charles Schwab, sold US$10m worth of shares at a price of US$76.40 per share. So what is clear is that an insider saw fit to sell at around the current price of US$71.36. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

In the last twelve months insiders purchased 35.00k shares for US$2.3m. But insiders sold 813.86k shares worth US$59m. Over the last year we saw more insider selling of Charles Schwab shares, than buying. 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!

I will like Charles Schwab 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 Of Charles Schwab

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Charles Schwab insiders own 1.4% of the company, worth about US$1.9b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Charles Schwab Insiders?

An insider sold Charles Schwab shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. 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. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Charles Schwab.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.