Don't Ignore The Insider Selling In Bank of New York Mellon

We wouldn't blame The Bank of New York Mellon Corporation (NYSE:BNY) shareholders if they were a little worried about the fact that Robin Vince, the President recently netted about US$7.4m selling shares at an average price of US$148. That sale reduced their total holding by 18% which is hardly insignificant, but far from the worst we've seen.

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The Last 12 Months Of Insider Transactions At Bank of New York Mellon

Notably, that recent sale by Robin Vince is the biggest insider sale of Bank of New York Mellon shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$149. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 18% of Robin Vince's holding.

Insiders in Bank of New York Mellon didn't buy any shares in 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!

Check out our latest analysis for Bank of New York Mellon

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Does Bank of New York Mellon 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Bank of New York Mellon insiders own 0.1% of the company, worth about US$134m. 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 Bank of New York Mellon Insider Transactions Indicate?

Insiders sold Bank of New York Mellon 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 Bank of New York Mellon is growing earnings. 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 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. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Bank of New York Mellon.

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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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