Some Northern Trust Corporation (NASDAQ:NTRS) shareholders may be a little concerned to see that the Executive VP & CFO, David Fox, recently sold a substantial US$3.3m worth of stock at a price of US$166 per share. That sale reduced their total holding by 40% which is hardly insignificant, but far from the worst we've seen.

The Last 12 Months Of Insider Transactions At Northern Trust

The Executive VP & COO, Peter Cherecwich, made the biggest insider sale in the last 12 months. That single transaction was for US$3.7m worth of shares at a price of US$150 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$164. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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 31% of Peter Cherecwich's holding.

Happily, we note that in the last year insiders paid US$753k for 5.66k shares. But insiders sold 117.48k shares worth US$16m. In total, Northern Trust insiders sold more than they bought over the last year. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of Northern Trust

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Northern Trust insiders own 1.5% of the company, currently worth about US$474m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Northern Trust Tell Us?

The insider sales have outweighed the insider buying, at Northern Trust, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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.

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.

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.