Don't Ignore The Fact That This Insider Just Sold Some Shares In Selective Insurance Group, Inc. (NASDAQ:SIGI)

By
Simply Wall St
Published
February 18, 2022
NasdaqGS:SIGI
Source: Shutterstock

We wouldn't blame Selective Insurance Group, Inc. (NASDAQ:SIGI) shareholders if they were a little worried about the fact that Gregory Murphy, the Non-Executive Chairman recently netted about US$776k selling shares at an average price of US$77.59. However, that sale only accounted for 5.4% of their holding, so arguably it doesn't say much about their conviction.

Check out our latest analysis for Selective Insurance Group

The Last 12 Months Of Insider Transactions At Selective Insurance Group

Notably, that recent sale by Non-Executive Chairman Gregory Murphy was not the only time they sold Selective Insurance Group shares this year. They previously made an even bigger sale of -US$2.4m worth of shares at a price of US$75.59 per share. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$76.55. 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. We note that the biggest single sale was only 13%of Gregory Murphy's holding.

Insiders in Selective Insurance Group didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NasdaqGS:SIGI Insider Trading Volume February 18th 2022

I will like Selective Insurance Group 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

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Selective Insurance Group insiders own about US$83m worth of shares. That equates to 1.8% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Selective Insurance Group Tell Us?

Insiders haven't bought Selective Insurance Group stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Selective Insurance Group is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! 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. Our analysis shows 2 warning signs for Selective Insurance Group (1 is significant!) and we strongly recommend you look at these before investing.

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, but not derivative transactions.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.