Over the past year, many Arthur J. Gallagher & Co. (NYSE:AJG) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

The Last 12 Months Of Insider Transactions At Arthur J. Gallagher

The Corporate VP & CFO, Douglas Howell, made the biggest insider sale in the last 12 months. That single transaction was for US$4.0m worth of shares at a price of US$250 each. That means that an insider was selling shares at slightly below the current price (US$284). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 16% of Douglas Howell's holding.

In total, Arthur J. Gallagher insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Arthur J. Gallagher Insiders Bought Stock Recently

There has been significantly more insider buying, than selling, at Arthur J. Gallagher, over the last three months. We can see that Executive VP & COO Patrick Gallagher paid US$317k for shares in the company. On the other hand, Independent Director Sherry Barrat netted US$259k by selling. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.

Insider Ownership Of Arthur J. Gallagher

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Arthur J. Gallagher insiders own 1.2% of the company, currently worth about US$746m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Arthur J. Gallagher Tell Us?

It is good to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Arthur J. Gallagher. Case in point: We've spotted 2 warning signs for Arthur J. Gallagher you should be aware of.

But note: Arthur J. Gallagher 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 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.