Omnicom Group Insiders Sell US$15m Of Stock, Possibly Signalling Caution

In the last year, many Omnicom Group Inc. (NYSE:OMC) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, 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.

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 Omnicom Group

The Last 12 Months Of Insider Transactions At Omnicom Group

Over the last year, we can see that the biggest insider sale was by the Chairman & CEO, John Wren, for US$9.4m worth of shares, at about US$93.84 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$74.55. So it may not tell us anything about how insiders feel about the current share price.

Omnicom Group insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insiders At Omnicom Group Have Sold Stock Recently

Over the last three months, we've seen a bit of insider selling at Omnicom Group. Independent Director Linda Rice only netted US$37k selling shares, in that period. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.

Insider Ownership Of Omnicom Group

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Omnicom Group insiders own about US$140m worth of shares (which is 1.0% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Omnicom Group Insiders?

While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Omnicom Group insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Omnicom Group and understanding it should be part of your investment process.

Of course Omnicom Group 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.