We wouldn’t blame United Parcel Service, Inc. (NYSE:UPS) shareholders if they were a little concerned that Kevin Warren, the Executive Vice President and Chief Marketing Officer recently made approximately US$2.5 million selling shares at an average price of US$192. Americans. This decreased their ownership by a very significant 100%, which presumably implies a strong desire to reallocate capital.
United Parcel Service insider trades over the past year
In fact, the recent sale by Kevin Warren was the largest sale of United Parcel Service stock by an insider in the past twelve months, according to our records. Clearly, then, an insider wanted to take money off the table, even below the current price of US$197. Generally, we consider it disheartening when insiders sell below the current price, as it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can’t be sure if it means insiders believe the stock is fully priced, so it’s only a weak sign. This single sale represented 100% of Kevin Warren’s stake.
You can see a visual representation of insider trading (by companies and individuals) over the past 12 months, below. If you want to know exactly who sold, how much and when, just click on the chart below!
If you like buying stocks that insiders are buying, rather than selling, then you might love this free list of companies. (Hint: insiders bought them).
Examining the total insider holdings in a company can help you know if they are well aligned with common shareholders. High insider participation often makes company management more concerned with the interests of shareholders. United Parcel Service insiders own approximately $136 million in stock (or 0.08% of the company). This type of significant insider ownership generally increases the chances that the company will be run in the best interests of all shareholders.
So what does this data suggest about United Parcel Service insiders?
An insider recently sold shares of United Parcel Service, but did not buy any. And even if we look at last year, we haven’t seen any purchases. On the plus side, United Parcel Service is making money and increasing profits. Although insiders hold a lot of stock in the company (which is good), our analysis of their dealings does not give us confidence in the company. So these insider trades can help us build a thesis on the stock, but it’s also helpful to know the risks this company faces. At Simply Wall St, we found 2 warning signs for United Parcel Service that deserve your attention before buying shares.
If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of attractive companies, which have a high return on equity and low debt.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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