Insiders at Visa Inc. sold US$3.9m worth of stock at an average price of US$230 a share over the past year, making the most of their investment. After the stock price dropped 5.5% last week, the company's market value declined by US$23b, but insiders were able to mitigate their losses.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Visa Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Vice Chair, Kelly Tullier, sold US$2.9m worth of shares at a price of US$232 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$194). So it is hard to draw any strong conclusion from it.
Insiders in Visa didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below.
Insiders at Visa Have Sold Stock Recently
The last quarter saw substantial insider selling of Visa shares. Specifically, Independent Director Robert Matschullat ditched US$235k 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.
Insider Ownership of Visa
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Visa insiders own 0.05% of the company, currently worth about US$202m based on the recent share price. 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 Visa Tell Us?
An insider sold Visa shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since Visa is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Visa.
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