The fact that multiple Arthur J. Gallagher & Co. (NYSE:AJG) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Arthur J. Gallagher

The Last 12 Months Of Insider Transactions At Arthur J. Gallagher

The Corporate VP & CFO, Douglas Howell, made the biggest insider sale in the last 12 months. That single transaction was for US$4.0m worth of shares at a price of US$250 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$276. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 16% of Douglas Howell's holding.

In the last year Arthur J. Gallagher insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Arthur J. Gallagher 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.

Arthur J. Gallagher Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Arthur J. Gallagher shares. In total, insiders sold US$4.3m 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 Of Arthur J. Gallagher

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Arthur J. Gallagher insiders own about US$733m worth of shares (which is 1.2% of the company). 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 Arthur J. Gallagher Insider Transactions Indicate?

Insiders haven't bought Arthur J. Gallagher stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But since Arthur J. Gallagher is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for Arthur J. Gallagher and we suggest you have a look.

But note: Arthur J. Gallagher 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 of direct interests only, but not derivative transactions or indirect interests.

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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.