Bright Horizons Family Solutions Inc.'s (NYSE:BFAM) value has fallen 10% in the last week, but insiders who sold US$11m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of US$118 is still lower than the current share price.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Bright Horizons Family Solutions Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chief Financial Officer, Elizabeth Boland, sold US$1.8m worth of shares at a price of US$114 per share. So we know that an insider sold shares at around the present share price of US$104. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

In the last year Bright Horizons Family Solutions insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. 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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Bright Horizons Family Solutions Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Bright Horizons Family Solutions. In total, insiders dumped US$1.7m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Bright Horizons Family Solutions Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Bright Horizons Family Solutions insiders own about US$49m worth of shares. That equates to 0.8% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Bright Horizons Family Solutions Insider Transactions Indicate?

Insiders haven't bought Bright Horizons Family Solutions stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But since Bright Horizons Family Solutions is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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 Bright Horizons Family Solutions you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.