Don't Ignore The Insider Selling In Travelers Companies

Some The Travelers Companies, Inc. (NYSE:TRV) shareholders may be a little concerned to see that insider Maria Olivo recently sold a substantial US$2.2m worth of stock at a price of US$370 per share. However, that sale only accounted for 4.8% of their holding, so arguably it doesn't say much about their conviction.

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Travelers Companies Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive VP & President of Business Insurance, Gregory Toczydlowski, for US$3.7m worth of shares, at about US$300 per share. That means that an insider was selling shares at slightly below the current price (US$364). 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. 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. We note that the biggest single sale was only 39% of Gregory Toczydlowski's holding.

Insiders in Travelers 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Travelers Companies

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Insider Ownership Of Travelers Companies

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that Travelers Companies insiders own 0.5% of the company, worth about US$362m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Travelers Companies Tell Us?

Insiders sold Travelers Companies shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But it is good to see that Travelers 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. Every company has risks, and we've spotted 2 warning signs for Travelers Companies (of which 1 makes us a bit uncomfortable!) you should know about.

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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.