Some CME Group Inc. (NASDAQ:CME) shareholders may be a little concerned to see that the Chairman & CEO, Terrence Duffy, recently sold a substantial US$10m worth of stock at a price of US$299 per share. That's a big disposal, and it decreased their holding size by 39%, which is notable but not too bad.

CME Group Insider Transactions Over The Last Year

In fact, the recent sale by Terrence Duffy was the biggest sale of CME Group shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at below the current price (US$302). 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. It is worth noting that this sale was only 39% of Terrence Duffy's holding.

In total, CME Group insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that CME Group insiders own 0.3% of the company, worth about US$332m. 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 CME Group Insider Transactions Indicate?

The stark truth for CME Group is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since CME Group is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that CME Group has 2 warning signs and it would be unwise to ignore these.

Of course CME Group 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.

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.