The TJX Companies, Inc. (NYSE:TJX) insiders sold US$9.7m worth of stock, possibly signalling a downtrend

By
Simply Wall St
Published
November 30, 2021
NYSE:TJX
Source: Shutterstock

Over the past year, many The TJX Companies, Inc. (NYSE:TJX) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for TJX Companies

The Last 12 Months Of Insider Transactions At TJX Companies

Over the last year, we can see that the biggest insider sale was by the Executive Chairman, Carol Meyrowitz, for US$5.4m worth of shares, at about US$74.07 per share. So what is clear is that an insider saw fit to sell at around the current price of US$69.40. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. 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).

All up, insiders sold more shares in TJX Companies than they bought, over 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!

insider-trading-volume
NYSE:TJX Insider Trading Volume December 1st 2021

I will like TJX Companies better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

TJX Companies Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at TJX Companies. In total, CEO, President & Director Ernie Herrman dumped US$1.3m 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 TJX 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. I reckon it's a good sign if insiders own a significant number of shares in the company. TJX Companies insiders own about US$120m worth of shares (which is 0.1% 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.

So What Do The TJX Companies Insider Transactions Indicate?

An insider hasn't bought TJX Companies stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. But since TJX 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. While we like knowing 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. For instance, we've identified 3 warning signs for TJX Companies (1 shouldn't be ignored) you should be aware of.

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, but not derivative transactions.

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