Stock Analysis

Travelers Companies Insiders Sell US$21m Of Stock, Possibly Signalling Caution

Published
NYSE:TRV

The fact that multiple The Travelers Companies, Inc. (NYSE:TRV) 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.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Travelers Companies

The Last 12 Months Of Insider Transactions At Travelers Companies

The Chairman & CEO, Alan Schnitzer, made the biggest insider sale in the last 12 months. That single transaction was for US$13m worth of shares at a price of US$266 each. That means that an insider was selling shares at around the current price of US$258. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

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

NYSE:TRV Insider Trading Volume November 13th 2024

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Insiders At Travelers Companies Have Sold Stock Recently

The last quarter saw substantial insider selling of Travelers Companies shares. Specifically, insiders ditched US$13m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Travelers Companies Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Travelers Companies insiders own 0.4% of the company, currently worth about US$222m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Travelers Companies Insiders?

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 since Travelers Companies is profitable and growing, we're not too worried by this. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Travelers Companies. Every company has risks, and we've spotted 1 warning sign for Travelers Companies you should know about.

Of course Travelers Companies 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.