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Don't Ignore The Fact That This Insider Just Sold Some Shares In Fifth Third Bancorp (NASDAQ:FITB)

Simply Wall St

We wouldn't blame Fifth Third Bancorp (NASDAQ:FITB) shareholders if they were a little worried about the fact that Philip McHugh, a company insider, recently netted about US$1.1m selling shares at an average price of US$30.25. That's a big dump, and it decreased their holding size by 23%, which is notable but not too bad.

See our latest analysis for Fifth Third Bancorp

The Last 12 Months Of Insider Transactions At Fifth Third Bancorp

Notably, that recent sale by Philip McHugh is the biggest insider sale of Fifth Third Bancorp shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$30.51, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower 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. We note that the biggest single sale was only 23%of Philip McHugh's holding.

In total, Fifth Third Bancorp insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NasdaqGS:FITB Recent Insider Trading, November 8th 2019

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Does Fifth Third Bancorp 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Fifth Third Bancorp insiders own 0.3% of the company, worth about US$58m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Fifth Third Bancorp Tell Us?

The stark truth for Fifth Third Bancorp is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Fifth Third Bancorp.

But note: Fifth Third Bancorp may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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, but not derivative transactions.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.