Looking at Bank of America Corporation's (NYSE:BAC ) insider transactions over the last year, we can see that insiders were net sellers. That is, there were more number of shares sold by insiders than there were purchased.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Bank of America Insider Transactions Over The Last Year
The President of Global Corporate & Investment Banking, Matthew Koder, made the biggest insider sale in the last 12 months. That single transaction was for US$7.7m worth of shares at a price of US$35.91 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$28.71. So it may not tell us anything about how insiders feel about the current share price. Matthew Koder was the only individual insider to sell shares in the last twelve months.
Matthew Koder divested 319.80k shares over the last 12 months at an average price of US$35.37. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Does Bank of America Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Bank of America insiders own 0.2% of the company, worth about US$430m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Bank of America Tell Us?
It doesn't really mean much that no insider has traded Bank of America shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Bank of America insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Bank of America. In terms of investment risks, we've identified 1 warning sign with Bank of America and understanding it should be part of your investment process.
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.
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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