Possible Bearish Signals With Aflac Insiders Disposing Stock

Aflac Incorporated +1.05% Post

Aflac Incorporated

AFL

87.69

87.73

+1.05%

+0.05% Post

Over the past year, many Aflac Incorporated (NYSE:AFL) insiders sold a significant stake in the company which may have piqued investors' interest. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Aflac

Aflac Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive Vice President, Frederick John Crawford, for US$8.1m worth of shares, at about US$81.37 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$83.61. 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. 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. We note that the biggest single sale was only 30% of Frederick John Crawford's holding.

In the last twelve months insiders purchased 2.50k shares for US$191k. But they sold 179.43k shares for US$15m. Over the last year we saw more insider selling of Aflac shares, than buying. 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!

insider-trading-volume
NYSE:AFL Insider Trading Volume April 29th 2024

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).

Aflac Insiders Are Selling The Stock

We've seen more insider selling than insider buying at Aflac recently. We note insiders cashed in US$1.3m worth of shares. Meanwhile insiders bought US$191k worth , as we said above . Generally this level of net selling might be considered a bit bearish.

Does Aflac Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Aflac insiders own 0.8% of the company, worth about US$404m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Aflac Tell Us?

The insider sales have outweighed the insider buying, at Aflac, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But since Aflac 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. Our analysis shows 2 warning signs for Aflac (1 shouldn't be ignored!) and we strongly recommend you look at these before investing.

Of course Aflac 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.

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