MD, General Counsel & Corporate Secretary Of Charles Schwab Sold 99% Of Their Shares

We wouldn't blame The Charles Schwab Corporation (NYSE:SCHW) shareholders if they were a little worried about the fact that Peter Morgan, the MD, General Counsel & Corporate Secretary recently netted about US$1.8m selling shares at an average price of US$72.23. That diminished their holding by a very significant 99%, which arguably implies a strong desire to reallocate capital.

View our latest analysis for Charles Schwab

Charles Schwab Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Founder & Co-Chairman, Charles Schwab, for US$7.6m worth of shares, at about US$64.72 per share. That means that even when the share price was below the current price of US$75.19, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 0.5% of Charles Schwab's holding.

All up, insiders sold more shares in Charles Schwab than they bought, over 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!

I will like Charles Schwab better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Charles Schwab insiders own about US$2.4b worth of shares (which is 1.8% 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 haven't bought Charles Schwab stock in the last three months, but there was some selling. 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. 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. At Simply Wall St, we found 1 warning sign for Charles Schwab that deserve your attention before buying any shares.

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.