Don't Ignore The Insider Selling In State Street

Anyone interested in State Street Corporation (NYSE:STT) should probably be aware that a company insider, Donna Milrod, recently divested US$231k worth of shares in the company, at an average price of US$72.33 each. However, the silver lining is that the sale only reduced their total holding by 8.3%, so we're hesitant to read anything much into it, on its own.

View our latest analysis for State Street

State Street Insider Transactions Over The Last Year

Notably, that recent sale by Donna Milrod is the biggest insider sale of State Street shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$73.37, an insider wanted to cash in some shares. 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. It is worth noting that this sale was only 8.3% of Donna Milrod's holding.

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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership Of State Street

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that State Street insiders own 0.6% of the company, worth about US$143m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The State Street Insider Transactions Indicate?

An insider hasn't bought State Street stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. 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 these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - State Street has 1 warning sign we think you should be aware of.

But note: State Street 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.