We wouldn't blame Chubb Limited (NYSE:CB) shareholders if they were a little worried about the fact that Peter Enns, the Executive VP & CFO recently netted about US$2.2m selling shares at an average price of US$266. That's a big disposal, and it decreased their holding size by 15%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At Chubb
In the last twelve months, the biggest single sale by an insider was when the Executive Chairman & CEO, Evan Greenberg, sold US$14m worth of shares at a price of US$248 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$262. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 8.1% of Evan Greenberg's stake.
Chubb insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Insider Ownership
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. Chubb insiders own about US$500m worth of shares (which is 0.5% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Chubb Tell Us?
Insiders sold Chubb shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since Chubb is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Chubb you should be aware of.
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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 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.
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