We wouldn't blame The Progressive Corporation (NYSE:PGR) shareholders if they were a little worried about the fact that Roger Farah, the Independent Director recently netted about US$1.1m selling shares at an average price of US$227. That diminished their holding by a very significant 75%, which arguably implies a strong desire to reallocate capital.
The Last 12 Months Of Insider Transactions At Progressive
In the last twelve months, the biggest single sale by an insider was when the Independent Director, Barbara Snyder, sold US$2.9m worth of shares at a price of US$133 per share. That means that even when the share price was below the current price of US$219, 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. This single sale was 77% of Barbara Snyder's stake.
Progressive 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Progressive insiders own 0.3% of the company, worth about US$377m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Progressive Tell Us?
Insiders haven't bought Progressive stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But it is good to see that Progressive is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Progressive. While conducting our analysis, we found that Progressive has 1 warning sign and it would be unwise to ignore this.
Of course Progressive 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.
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