Possible Bearish Signals With Brighthouse Financial Insiders Disposing Stock

The fact that multiple Brighthouse Financial, Inc. (NASDAQ:BHF) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Brighthouse Financial

Brighthouse Financial Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the President, Eric Steigerwalt, for US$1.2m worth of shares, at about US$47.77 per share. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$48.73. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. This single sale was just 6.0% of Eric Steigerwalt's stake.

Over the last year we saw more insider selling of Brighthouse Financial shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Brighthouse Financial Insiders Bought Stock Recently

Over the last quarter, Brighthouse Financial insiders have spent a meaningful amount on shares. Independent Director Michael Inserra spent US$108k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Brighthouse Financial

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. Brighthouse Financial insiders own about US$34m worth of shares. That equates to 1.1% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Brighthouse Financial Insider Transactions Indicate?

It is good to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. While recent transactions indicate confidence in Brighthouse Financial, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Brighthouse Financial.

Of course Brighthouse Financial 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com