This Insider Has Just Sold Shares In TJX Companies

We wouldn't blame The TJX Companies, Inc. (NYSE:TJX) shareholders if they were a little worried about the fact that Ernie Herrman, the CEO, President & Director recently netted about US$2.3m selling shares at an average price of US$121. However, that sale only accounted for 3.6% of their holding, so arguably it doesn't say much about their conviction.

View our latest analysis for TJX Companies

The Last 12 Months Of Insider Transactions At TJX Companies

Notably, that recent sale by CEO, President & Director Ernie Herrman was not the only time they sold TJX Companies shares this year. Earlier in the year, they fetched US$121 per share in a -US$2.4m sale. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$121. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 3.5% of Ernie Herrman's holding.

Insiders in TJX 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership Of TJX Companies

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. TJX Companies insiders own about US$167m worth of shares (which is 0.1% of the company). 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 TJX Companies Insider Transactions Indicate?

Insiders sold TJX Companies shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But it is good to see that TJX Companies is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. In terms of investment risks, we've identified 1 warning sign with TJX Companies and understanding it should be part of your investment process.

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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.