The fact that several Brown & Brown, Inc. (NYSE:BRO) Insiders dumping a significant amount of shares over the past year may have caused some confusion among investors. When evaluating insider transactions, it is usually more useful to know whether insiders are buying than whether they are selling, as the latter is open to many interpretations. However, when numerous insiders are selling, shareholders should investigate further.

While we would never recommend that investors base their decisions solely on the behavior of company executives, we believe it is foolish to completely ignore insider transactions.

Check out our latest analysis for Brown & Brown

Brown & Brown’s insider transactions in the last year

The largest single sale by an insider in the last twelve months was when CEO J. Brown sold US$20 million worth of shares at a price of US$86.05 per share. This means that an insider wanted to sell some shares even when the share price was below the current price of US$101. We generally view it as a negative when insiders have sold, particularly when they did so below the current price, because it implies they thought a lower price was appropriate. While insider selling is sometimes discouraging, it is only a weak signal. It’s worth noting that this sale only affected 0.6% of J. Brown’s shares.

Insiders at Brown & Brown have not purchased any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the chart below you can see the exact details of each insider transaction!

If you like buying stocks that insiders are buying and not selling, you might like this free List of companies. (Note: most of them fly under the radar).

Insiders at Brown & Brown recently sold shares

Over the past three months, we have seen significant insider selling at Brown & Brown. In total, insiders sold $552,000 worth of shares during that time, and we saw no purchases. Given that, it’s hard to say that all insiders think the stock is a bargain.

Insider ownership

Another way to test the alignment between a company’s leaders and other shareholders is to look at how many shares they own. We typically like to see a relatively high level of insider ownership. Brown & Brown insiders own about $4.8 billion worth of shares (that’s 17% of the company). Most shareholders would be happy to see this kind of insider ownership, as it suggests that management’s incentives are well aligned with those of other shareholders.

So what do Brown & Brown’s insider transactions mean?

Insiders haven’t bought any shares of Brown & Brown in the last three months, but there have been some sales. And there haven’t been any purchases in the last year that would give us comfort. But it’s good to see Brown & Brown growing its earnings. The company boasts high insider ownership, but given the history of share sales, we’re a bit hesitant. While it’s good to know what’s going on with insider ownership and transactions, we make sure to also consider the risks associated with a stock before making an investment decision. To help with this, we’ve found 1 warning sign which you should take a look at to get a better idea of ​​Brown & Brown.

But please note: Brown & Brown may not be the best stock to buySo take a look at the free List of interesting companies with high return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulator. Currently, we only consider open market transactions and private disposals of direct holdings, but not derivative transactions or indirect holdings.

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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.