Insiders At Aflac Sold US$14m In Stock, Alluding To Potential Weakness

In the last year, many Aflac Incorporated (NYSE:AFL) insiders sold a substantial stake in the company which may have sparked shareholders' attention. 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 insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Aflac

The Last 12 Months Of Insider Transactions At Aflac

Over the last year, we can see that the biggest insider sale was by the Executive Vice President, Frederick John Crawford, for US$8.1m worth of shares, at about US$81.37 per share. That means that an insider was selling shares at slightly below the current price (US$109). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 30% of Frederick John Crawford's holding.

In the last twelve months insiders purchased 2.50k shares for US$191k. On the other hand they divested 167.80k shares, for US$14m. Over the last year we saw more insider selling of Aflac shares, than buying. 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!

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

Insiders At Aflac Have Sold Stock Recently

The last three months saw significant insider selling at Aflac. Specifically, Independent Director Thomas Kenny ditched US$198k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of Aflac

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Aflac insiders own 0.8% of the company, currently worth about US$491m based on the recent share price. 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 Aflac Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Aflac makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Aflac.

But note: Aflac 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.