Over the past year, many Philip Morris International Inc. (NYSE:PM) insiders sold a significant stake in the company which may have piqued investors’ interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
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Over the last year, we can see that the biggest insider sale was by the Non-Executive Chairman, Andre Calantzopoulos, for US$13m worth of shares, at about US$130 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$166. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it’s only a weak signal. We note that the biggest single sale was only 9.6% of Andre Calantzopoulos’s holding.
Insiders in Philip Morris International didn’t buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for Philip Morris International
I will like Philip Morris International better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Philip Morris International insiders own about US$383m worth of shares (which is 0.1% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
The fact that there have been no Philip Morris International insider transactions recently certainly doesn’t bother us. It’s great to see high levels of insider ownership, but looking back over the last year, we don’t gain confidence from the Philip Morris International insiders selling. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. At Simply Wall St, we’ve found that Philip Morris International has 2 warning signs (1 is a bit concerning!) that deserve your attention before going any further with your analysis.