Despite The Western Union Company (NYSE:WU) stock rising 3.3% last week, insiders who sold US$301,000 worth of stock in the past 12 months should be better off off. Holding shares would have meant that their investment would be worth less today than it was when sold. Thus, selling at an average price of US$23.91, higher than the current price, might have been the best decision.
While we would never suggest that investors base their decisions solely on what a company’s directors have done, we think it makes perfect sense to keep tabs on what insiders are doing.
Western Union insider transactions over the past year
Chairman Hikmet Ersek made the biggest insider sell in the last 12 months. This single transaction was for US$301,000 of shares at a price of US$23.91 each. While we generally don’t like to see insider selling, it’s more of a concern if the selling takes place at a lower price. The silver lining is that this sale took place above the last price (US$17.15). So this may not tell us anything about what insiders think of the current stock price. Hikmet Ersek was the only individual insider to sell in the past year.
You can see insider trading (by companies and individuals) over the past year illustrated in the table below. By clicking on the graph below, you will be able to see the precise detail of each insider trade!
I’d like Western Union better if I see big insider buys. In the meantime, watch this free list of growing companies with significant and recent insider buying.
Western Union Insider Ownership
Another way to test alignment between a company’s executives and other shareholders is to look at how many shares they own. I think it’s a good sign if insiders have a significant number of shares in the company. Western Union insiders own about $36 million in stock. This equals 0.5% of the business. We have certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest an alignment between insiders and other shareholders.
So what do Western Union insider transactions indicate?
There have been no insider trades in the last three months – that’s not saying much. Still, insider trading at Western Union over the past 12 months isn’t very encouraging. The modest level of insider ownership is, at least, some comfort. So, while it is useful to know what insiders are doing in terms of buying or selling, it is also useful to know the risks that a particular company faces. Example: we have identified 2 warning signs for Western Union you should be aware.
If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of attractive companies, which have a high return on equity and low debt.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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