Despite the fact that The TJX Companies, Inc. (NYSE:TJX) stock rose 5.6% last week, insiders who sold US$23m worth of stock in the previous 12 months are likely to be better off. Selling at an average price of US$66.50, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.
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.
TJX Companies Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Executive Chairman, Carol Meyrowitz, sold US$4.8m worth of shares at a price of US$67.62 per share. So what is clear is that an insider saw fit to sell at around the current price of US$65.80. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
In total, TJX Companies insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like TJX Companies better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders At TJX Companies Have Sold Stock Recently
The last three months saw significant insider selling at TJX Companies. In total, insiders dumped US$12m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Does TJX Companies Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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 TJX Companies insiders own 0.2% of the company, worth about US$131m. 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 TJX Companies Insider Transactions Indicate?
Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that TJX Companies is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Be aware that TJX Companies is showing 3 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...
But note: TJX 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, 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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