It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell KeyCorp (NYSE:KEY), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
The Last 12 Months Of Insider Transactions At KeyCorp
In the last twelve months, the biggest single sale by an insider was when the Executive VP & President of Key Institutional Bank, Andrew Paine, sold US$1.8m worth of shares at a price of US$18.26 per share. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$18.45. 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. 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. This single sale was just 44% of Andrew Paine's stake.
In the last twelve months insiders purchased 15000 shares for US$275k. On the other hand they divested 124043 shares, for US$2.2m. All up, insiders sold more shares in KeyCorp than they bought, over the last year. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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KeyCorp Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at KeyCorp. In total, Chief Information Officer & Executive VP Amy Brady sold US$195k 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.
Does KeyCorp 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that KeyCorp insiders own 0.5% of the company, worth about US$89m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At KeyCorp Tell Us?
An insider sold KeyCorp shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that KeyCorp is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for KeyCorp.
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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, 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 email@example.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.