Possible Bearish Signals With Aon Insiders Disposing Stock

The fact that multiple Aon plc (NYSE:AON) 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, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Aon

Aon Insider Transactions Over The Last Year

The Independent Non-Executive Chairman of the Board Lester Knight made the biggest insider purchase in the last 12 months. That single transaction was for US$15m worth of shares at a price of US$302 each. We do like to see buying, but this purchase was made at well below the current price of US$359. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid US$18m for 60.73k shares. On the other hand they divested 80.77k shares, for US$25m. Over the last year we saw more insider selling of Aon shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Aon Insiders Are Selling The Stock

We've seen more insider selling than insider buying at Aon recently. We note insiders cashed in US$444k worth of shares. On the other hand we note Independent Director Byron Spruell bought US$247k worth of shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Does Aon Boast High Insider Ownership?

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. Aon insiders own about US$892m worth of shares (which is 1.1% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Aon Tell Us?

The insider sales have outweighed the insider buying, at Aon, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. 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. For instance, we've identified 2 warning signs for Aon (1 is a bit concerning) you should be aware of.

Of course Aon 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.