Don't Ignore The Insider Selling In Charles Schwab

Some The Charles Schwab Corporation (NYSE:SCHW) shareholders may be a little concerned to see that the Founder & Co-Chairman, Charles Schwab, recently sold a substantial US$10m worth of stock at a price of US$94.22 per share. However, that sale only accounted for 0.7% 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 Charles Schwab

In fact, the recent sale by Founder & Co-Chairman Charles Schwab was not their only sale of Charles Schwab shares this year. They previously made an even bigger sale of -US$26m worth of shares at a price of US$97.04 per share. So we know that an insider sold shares at around the present share price of US$94.20. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Insiders in Charles Schwab 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. 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 Charles Schwab

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Does Charles Schwab Boast High 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. Charles Schwab insiders own about US$2.0b worth of shares (which is 1.2% of the company). 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?

Insiders sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But it is good to see that Charles Schwab 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. 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 1 warning sign for Charles Schwab you should be aware of.

Of course Charles Schwab may not be the best stock to buy. So you may wish to see this free collection of high quality 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.