Don't Ignore The Insider Selling In Chubb

We wouldn't blame Chubb Limited (NYSE:CB) shareholders if they were a little worried about the fact that Peter Enns, the Executive VP & CFO recently netted about US$2.2m selling shares at an average price of US$266. That's a big disposal, and it decreased their holding size by 15%, which is notable but not too bad.

Check out our latest analysis for Chubb

Chubb Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive Chairman & CEO, Evan Greenberg, for US$14m worth of shares, at about US$248 per share. That means that even when the share price was below the current price of US$263, an insider wanted to cash in some shares. 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. 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. We note that the biggest single sale was only 8.1% of Evan Greenberg's holding.

Insiders in Chubb 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. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Chubb 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

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Chubb insiders own about US$516m worth of shares (which is 0.5% 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 Chubb Tell Us?

Insiders haven't bought Chubb stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But since Chubb is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 2 warning signs for Chubb you should be aware of.

Of course Chubb 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.

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

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