Chairman & CEO Terrence Duffy Sold A Bunch Of Shares In CME Group
Some CME Group Inc. (NASDAQ:CME) shareholders may be a little concerned to see that the Chairman & CEO, Terrence Duffy, recently sold a substantial US$6.7m worth of stock at a price of US$270 per share. That sale reduced their total holding by 28% which is hardly insignificant, but far from the worst we've seen.
CME Group Insider Transactions Over The Last Year
In fact, the recent sale by Chairman & CEO Terrence Duffy was not their only sale of CME Group shares this year. Earlier in the year, they fetched US$259 per share in a -US$7.8m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$273. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. 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. It is worth noting that this sale was only 36% of Terrence Duffy's holding.
Over the last year, we can see that insiders have bought 2.53k shares worth US$609k. But insiders sold 124.13k shares worth US$33m. Over the last year we saw more insider selling of CME Group shares, than buying. 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!
View our latest analysis for CME Group
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Does CME Group Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. CME Group insiders own 0.3% of the company, currently worth about US$290m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The CME Group Insider Transactions Indicate?
Unfortunately, there has been more insider selling of CME Group stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, CME Group makes money, and is growing profits. 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. In terms of investment risks, we've identified 2 warning signs with CME Group and understanding them should be part of your investment process.
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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.