BlackRock, Inc.'s (NYSE:BLK) insiders who sold earlier this year may be offered solace in this recent price drop

BlackRock, Inc.'s (NYSE:BLK) stock price has dropped 7.0% in the previous week, but insiders who sold US$88m in stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of US$708 is still lower than the current share price.

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.

See our latest analysis for BlackRock

The Last 12 Months Of Insider Transactions At BlackRock

Over the last year, we can see that the biggest insider sale was by the Chairman & CEO, Laurence Fink, for US$30m worth of shares, at about US$685 per share. That means that an insider was selling shares at slightly below the current price (US$721). 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. 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 7.3% of Laurence Fink's holding.

In total, BlackRock insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

BlackRock Insiders Are Selling The Stock

The last three months saw significant insider selling at BlackRock. Specifically, insiders ditched US$16m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does BlackRock Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. BlackRock insiders own about US$1.1b worth of shares (which is 1.0% 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.

So What Does This Data Suggest About BlackRock Insiders?

Insiders sold BlackRock shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of BlackRock.

But note: BlackRock 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, 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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