Even though Blackstone Inc. (NYSE:BX) stock gained 14% last week, insiders who sold US$20m worth of stock over the past year are probably better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$131, which is higher than the current price, may have been the best decision.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Blackstone
The Global Head of Private Equity & Director, Joseph Baratta, made the biggest insider sale in the last 12 months. That single transaction was for US$5.1m worth of shares at a price of US$135 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$93.52. 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 22.71k shares. On the other hand they divested 155.02k shares, for US$20m. 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!
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).
Blackstone Insiders Bought Stock Recently
At Blackstone,over the last quarter, we have observed quite a lot more insider buying than insider selling. Insiders spent US$328k on shares. But we did see insider Ruth Porat sell shares worth US$59.8. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Blackstone insiders own about US$155m worth of shares (which is 0.1% of the company). 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 Blackstone Tell Us?
It is good to see recent purchasing. But we can't say the same for the transactions over the last 12 months. The high levels of insider ownership, and the recent buying by some insiders suggests they are well aligned and optimistic. 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. Every company has risks, and we've spotted 1 warning sign for Blackstone you should know about.
But note: Blackstone 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, but not derivative transactions.
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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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