Yahoo Finance Arch Capital Group Insiders Sold US$71m Of Shares Suggesting Hesitancy
The fact that multiple Arch Capital Group Ltd. (NASDAQ:ACGL) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Arch Capital Group
The Last 12 Months Of Insider Transactions At Arch Capital Group
In the last twelve months, the biggest single sale by an insider was when the CEO & Director, Marc Grandisson, sold US$30m worth of shares at a price of US$85.62 per share. That means that even when the share price was below the current price of US$90.59, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 15% of Marc Grandisson's holding.
Insiders in Arch Capital Group 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!
I will like Arch Capital Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Arch Capital Group Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Arch Capital Group. In total, insiders sold US$11m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership Of Arch Capital Group
For a common shareholder, it is worth checking how many shares are held by company insiders. 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 Arch Capital Group insiders own 2.7% of the company, worth about US$925m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Arch Capital Group Insiders?
Insiders sold Arch Capital Group shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since Arch Capital Group is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing 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. At Simply Wall St, we've found that Arch Capital Group has 2 warning signs (1 doesn't sit too well with us!) that deserve your attention before going any further with your analysis.
Of course Arch Capital Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
