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Blackstone Inc.'s (NYSE:BX)) market cap declines to US$93b but insiders who sold US$23m stock were able to hedge their losses

Insiders seem to have made the most of their holdings by selling US$23m worth of Blackstone Inc. (NYSE:BX) stock at an average sell price of US$124 during the past year. The company’s market cap plunged by US$6.7b after price dropped by 11% last week but insiders were able to limit their loss to an extent.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Blackstone

Blackstone Insider Transactions Over The Last Year

The Chief Legal Officer, John Finley, made the biggest insider sale in the last 12 months. That single transaction was for US$5.4m worth of shares at a price of US$108 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$78.73. So it may not tell us anything about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid US$2.5m for 22.87k shares. But they sold 184.52k shares for US$23m. All up, insiders sold more shares in Blackstone than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

I will like Blackstone better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Blackstone Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at Blackstone. In that time, Chief Legal Officer John Finley dumped US$5.4m worth of shares. On the flip side, insider Ruth Porat spent US$14k on purchasing shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

Insider Ownership Of Blackstone

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Blackstone insiders own 0.1% of the company, worth about US$139m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Blackstone Insider Transactions Indicate?

The stark truth for Blackstone 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. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While we like knowing 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. At Simply Wall St, we've found that Blackstone has 2 warning signs (1 can't be ignored!) that deserve your attention before going any further with your analysis.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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