The fact that several Walmart Inc. (NYSE:WMT) insiders selling a significant number of stocks over the past year could have raised some eyebrows among investors. When evaluating insider trading, it is usually more beneficial to know whether insiders are buying or selling, as the latter is open to many interpretations. Shareholders, however, need to look deeper if several insiders are selling shares over a period of time.
While we believe stockholders shouldn’t just follow insider trades, logic dictates that you should pay close attention to whether insiders are buying or selling stock.
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The last 12 months of insider trading at Walmart
Executive VP, Judith McKenna, made the largest insider sale in the past 12 months. That one transaction was for US$3.0 million worth of shares at a price of US$148 each. So we know that an insider sold stock at the current price of $138. In general, we don’t like insider selling, but the lower the selling price, the more it worries us. We note that this sale happened around the current price, so it’s not a big concern, although it’s not a good sign.
In the past year, Walmart insiders bought no company stock. Below is a visual representation of insider trading (by companies and individuals) over the past 12 months. To find out exactly who sold for how much and when, just click on the chart below!
If you enjoy buying stocks that insiders buy rather than sell, this might be for you free list of companies. (Hint: insiders bought them).
Walmart Insiders are selling the shares
The past three months have seen a lot of insider selling at Walmart. Notably, insiders dumped $5.5 million worth of stock during that time, and we didn’t record a single purchase. In general, this makes us a little cautious, but it’s not all.
Owned by insiders
For an ordinary shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the share of insiders, the more likely insiders are incentivized to build the company for the long haul. It’s great to see that Walmart insiders own 0.9% of the company, worth about $3.4 billion. Most shareholders would welcome this kind of insider ownership, as it suggests that management’s incentives are well aligned with those of other shareholders.
So what do the Walmart Insider transactions indicate?
Insiders recently sold Walmart stock, but they didn’t buy any. And there were no purchases to reassure us in the past year. The company boasts a high degree of insider ownership, but we’re a little hesitant given its history of stock sales. So while it’s helpful to know what insiders are doing when it comes to buying or selling, it’s also helpful to know what risks a particular company faces. To help with this, we found out 1 warning sign that you have to feast your eyes to get a better picture of Walmart.
Naturally, you may find a fantastic investment by looking elsewhere. So check this out free list of interesting companies.
For the purposes of this section, insiders are those persons who report their transactions to the relevant regulatory authority. We currently take into account open market transactions and private placements, but not derivatives transactions.
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This Simply Wall St article is general in nature. We only comment based on historical data and analyst forecasts using an unbiased methodology and our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or your financial situation. We aim to provide you with long-term focused analytics driven by fundamental data. Please note that our analysis may not take into account the latest price sensitive company announcements or quality material. Simply Wall St has no exposure to the listed stocks.