This Insider Has Just Sold Shares In Brown & Brown

We wouldn't blame Brown & Brown, Inc. (NYSE:BRO) shareholders if they were a little worried about the fact that J. Brown, the Chairman of the Board recently netted about US$14m selling shares at an average price of US$105. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 0.3%.

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Brown & Brown Insider Transactions Over The Last Year

In fact, the recent sale by Chairman of the Board J. Brown was not their only sale of Brown & Brown shares this year. They previously made an even bigger sale of -US$20m worth of shares at a price of US$86.05 per share. That means that an insider was selling shares at slightly below the current price (US$105). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 0.6% of J. Brown's holding.

Insiders in Brown & Brown didn't buy any shares in the last year. 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!

I will like Brown & Brown better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

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. Brown & Brown insiders own 17% of the company, currently worth about US$5.0b 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 Brown & Brown Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Brown & Brown is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Brown & Brown. In terms of investment risks, we've identified 2 warning signs with Brown & Brown and understanding them should be part of your investment process.

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 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.