Don't Ignore The Insider Selling In Pinnacle West Capital

We wouldn't blame Pinnacle West Capital Corporation (NYSE:PNW) shareholders if they were a little worried about the fact that Jacob Tetlow, a company insider, recently netted about US$600k selling shares at an average price of US$92.37. That diminished their holding by a very significant 72%, which arguably implies a strong desire to reallocate capital.

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The Last 12 Months Of Insider Transactions At Pinnacle West Capital

Notably, that recent sale by insider Jacob Tetlow was not the only time they sold Pinnacle West Capital shares this year. They previously made an even bigger sale of -US$860k worth of shares at a price of US$90.80 per share. That means that even when the share price was below the current price of US$93.06, 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was 79% of Jacob Tetlow's holding.

Pinnacle West Capital insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Pinnacle West Capital

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of Pinnacle West Capital

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. Insiders own 0.3% of Pinnacle West Capital shares, worth about US$32m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Pinnacle West Capital Insiders?

An insider hasn't bought Pinnacle West Capital stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Be aware that Pinnacle West Capital is showing 3 warning signs in our investment analysis, and 1 of those is concerning...

But note: Pinnacle West Capital may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.