Some Arch Capital Group Ltd. (NASDAQ:ACGL) shareholders may be a little concerned to see that the President, Nicolas Alain Papadopoulo, recently sold a substantial US$5.3m worth of stock at a price of US$87.52 per share. However, that sale only accounted for 8.4% of their holding, so arguably it doesn't say much about their conviction.
The Last 12 Months Of Insider Transactions At Arch Capital Group
The CEO & Director, Marc Grandisson, made the biggest insider sale in the last 12 months. That single transaction was for US$30m worth of shares at a price of US$85.62 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$87.61. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 15% of Marc Grandisson's holding.
Arch Capital Group insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Arch Capital Group insiders own about US$910m worth of shares (which is 2.8% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Arch Capital Group Insider Transactions Indicate?
Insiders haven't bought Arch Capital Group stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. On the plus side, Arch Capital Group makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 2 warning signs we've spotted with Arch Capital Group (including 1 which makes us a bit uncomfortable).
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.