Have Insiders Been Buying Discover Financial Services (NYSE:DFS) Shares?
NYSE:DFS), you may well want to know whether insiders have been buying or selling.” data-reactid=”28″>We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Discover Financial Services (NYSE:DFS), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
study found that ‘insider purchases earn abnormal returns of more than 6% per year’.” data-reactid=”31″>We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year’.
Check out our latest analysis for Discover Financial Services ” data-reactid=”36″> Check out our latest analysis for Discover Financial Services
Discover Financial Services Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Glenn Schneider, for US$1.1m worth of shares, at about US$74.21 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$54.25). So it may not tell us anything about how insiders feel about the current share price.
In the last twelve months insiders purchased 37.43k shares for US$2.3m. But they sold 16.92k shares for US$1.2m. In the last twelve months there was more buying than selling by Discover Financial Services insiders. Their average price was about US$62.35. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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Discover Financial Services Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Discover Financial Services shares. Specifically, Independent Director Mary Bush ditched US$95k worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It’s great to see that Discover Financial Services insiders own 0.6% of the company, worth about US$107m. 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 Discover Financial Services Insider Transactions Indicate?
3 warning signs and it would be unwise to ignore these.” data-reactid=”58″>An insider hasn’t bought Discover Financial Services stock in the last three months, but there was some selling. But we take heart from prior transactions. On top of that, insiders own a significant portion of the company. So we’re not too bothered by recent selling. 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. While conducting our analysis, we found that Discover Financial Services has 3 warning signs and it would be unwise to ignore these.
list of interesting companies, that have HIGH return on equity and low debt.” data-reactid=”63″>If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”65″>This article by Simply Wall St is general in nature. 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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