The fact that several The Charles Schwab Corporation (NYSE:SCHW) insiders dumping a significant amount of stock over the past year may have raised some eyebrows among investors. When analyzing insider transactions, it is typically more valuable to know whether insiders are buying than to know whether they are selling, as the latter sends an ambiguous message. However, if multiple insiders are selling shares over a period of time, shareholders should take note as it could potentially be a red flag.

While we would never suggest that investors should base their decisions solely on the actions of a company's directors, we would think it would be foolish to ignore insider transactions entirely.

Check out our latest analysis for Charles Schwab

Charles Schwab insider transactions in the last year

We can see that the largest insider sale in the last year was by founder and co-chairman Charles Schwab for $10 million worth of shares at a price of around $76.40 per share. While we don't usually like to see insider selling, it's more worrying when the sales occur at a lower price. The silver lining is that this selloff occurred above the last price ($67.68). Therefore, there may not be much insight into insider confidence at current levels.

Happily, we note that insiders paid US$2.3m for 35,000 shares in the last year. But they sold 793.06 thousand shares for $57 million. Overall, insiders sold more Charles Schwab shares than bought them last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the graphic below you can see the exact details of each insider transaction!

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Insiders at Charles Schwab recently bought shares

In the last three months, there were significantly more insider purchases than sales at Charles Schwab. In fact, two insiders bought shares worth US$2.3m. But director Carolyn Schwab-Pomerantz sold $802,000 worth of shares. Insiders have spent more buying shares than selling them, so overall we think they're probably bullish.

Insider ownership by Charles Schwab

For a common shareholder, it is worth checking how many shares are held by company insiders. Typically, the higher the insider ownership, the more likely it is that insiders will have an incentive to build the company for the long term. It's great to see that Charles Schwab insiders own 1.4% of the company, worth about US$1.8b. Most shareholders would be happy to see this kind of insider ownership because it suggests management's incentives are well aligned with those of other shareholders.

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So what does this data say about Charles Schwab Insiders?

Recent insider buying is encouraging. On the other hand, the transaction history in the last year is not so positive. Recent purchases by some insiders, as well as high insider ownership, suggest that Charles Schwab insiders are fairly aligned and optimistic. That's why you should definitely take a look at it FREE Analyst forecast report for Charles Schwab.

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Insiders within the meaning of this article are persons who report their transactions to the relevant supervisory authority. We currently only consider open market transactions and private dispositions of direct holdings, but not derivative transactions or indirect holdings.

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term focused analysis based on fundamental data. Note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.