One Citigroup Insider Reduces His Company Stake

(CTN News) – Based on Citigroup Inc.’s (NYSE:C) insider transactions over the last year, insiders were net sellers. The number of shares that were sold by insiders exceeded the number of shares that were purchased.

In spite of the fact that we do not think shareholders should simply follow insider transactions, it is logic that you should pay some attention to whether insiders are buying or selling shares.

Citigroup Insider Transactions Over the Last 12 Months

Over the past year, the largest insider sale was made by Andrew Morton, Head of Markets, for approximately US$1.1 million worth of shares, at a price of about US$40.66 per share.

In this case, it is clear that an insider was looking to take advantage of the current market price of US$59.14 by selling below the current price. In general, we find it discouraging when insiders are selling below the current market price, as it suggests they are satisfied with the current price.

Although insider selling is not a positive sign, we cannot be certain whether it means insiders believe the shares are fully valued, therefore it is only a weak sign. It is noteworthy that Andrew Morton’s largest single sale represented only 6.4% of his holdings. Over the past year, only Andrew Morton has sold shares.

As shown in the chart below, insider transactions (by companies and individuals) have increased over the past year. By clicking on the chart, you will be able to view each individual transaction, including the share price, the individual, and the date!

The ownership of insiders

The ownership percentage of an organization by insiders is frequently checked by investors. The higher the insider ownership, the greater the likelihood that insiders will be incentivised to build the company for the long term. Insiders at Citigroup own approximately 232 million shares (which represents 0.2% of the company).

Insider ownership would be welcomed by most shareholders since it indicates that management incentives are aligned with those of other shareholders.

What can be determined about Citigroup insiders based on this data?

The fact that there have been no Citigroup insider transactions in recent years certainly does not worry us. Although we are pleased with the high percentage of insider ownership of Citigroup, we cannot say the same for the sale of shares.

Therefore, it is useful to know what insiders are doing in terms of buying or selling, but also to know the risks a particular business faces. As with any company, Citigroup has its share of risks, and we have identified one warning sign that you should be aware of.

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