We wouldn't blame The Travelers Companies, Inc. (NYSE:TRV) shareholders if they were a little worried about the fact that Jeffrey Klenk, a company insider, recently netted about US$2.0m selling shares at an average price of US$305. Probably the most concerning element of the whole transaction is that the disposal amounted to 51% of their entire holding.

The Last 12 Months Of Insider Transactions At Travelers Companies

Over the last year, we can see that the biggest insider sale was by the Executive VP & President of Business Insurance, Gregory Toczydlowski, for US$3.7m worth of shares, at about US$300 per share. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 39% of Gregory Toczydlowski's stake.

Insiders in Travelers Companies didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does Travelers Companies Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Travelers Companies insiders own 0.5% of the company, worth about US$304m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Travelers Companies Insider Transactions Indicate?

Insiders sold Travelers Companies shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since Travelers Companies is profitable and growing, we're not too worried by this. 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. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company.

But note: Travelers Companies may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.