Does Insider Ownership Matter ?

[ownyourfuture]

I have a simple spreadsheet for the individual stocks I own.
Columns for figures like, price/sales, PE, YOY Quarterly Earnings Growth, YOY Quarterly Rev Growth, ROE, Cash Per Share, Total Cash,Total Debt, Debt/Equity, & 1-3 & 5 year returns.

When I opened it up a month or so ago, I decided to add insider ownership figures. To say I was surprised how low the percentages were would be an understatement. Decided to investigate a little further.

According to investopedia, these are the top 25 stocks in the S&P 500.
https://www.investopedia.com/ask/answers/08/find-stocks-in-sp500.asp

Insider ownership % from yahoo finance.
Apparently, it doesn't matter anymore.

Apple Inc. (AAPL) 0.07%
Microsoft (MSFT) 0.05%
Amazon (AMZN) 9.73%
NVIDIA (NVDA) 4.18%
Alphabet (GOOG) 0.01%

Berkshire (BRKB.VI) 0.37%
Tesla, Inc. (TSLA) 13.06%
Meta (META) 0.23%
Exxon Mobil (XOM) 0.06%
UnitedHealth (UNH) 0.27%

Johnson & Johnson (JNJ) 0.10%
JPMorgan Chase (JPM) 0.90%
Visa Inc. (V) 0.12%
Procter & Gamble (PG) 0.12%
Mastercard (MA) 10.74%

Chevron (CVX) 0.04%
Home Depot (HD) 0.08%
AbbVie (ABBV) 0.13%
Eli Lilly (LLY) 0.15%
Merck (MRK) 0.09%

Broadcom (AVGO) 2.27%
PepsiCo (PEP) 0.15%
Coca-Cola (KO) 0.67%
Pfizer (PFE) 0.03%

 

[Kings over Queens]

I like inside ownership, but not necessarily for stocks in the S&P 500.

 

[ownyourfuture]

I like inside ownership, but not necessarily for stocks in the S&P 500.

That makes sense. Most companies in the S&P 500 are fairly mature & have 100's of millions, & in some cases, billions of shares outstanding.

 

[MichealKnight]

I certainly prefer more insider ownership to less. BUT.... cynic and skeptic as I am - it matters to me how much an individual owns. I see headlines "XYZ Director bought $200,000 in stock!". Great. But if a cursory search shows that Mr Director is probably worth $10 or 20 million bucks..... well, does nothing to me.

That's like me saying hey - I invested 1% more of my net worth in a business that I run. Isn't that a vote of confidence or what? Not to mention, if Mr Director loses money on the stock - ok, he goes home to millions. Me, it might mean a dent in college funds, etc.

 

[Free To Canoe]

I have a simple spreadsheet for the individual stocks I own.
Columns for figures like, price/sales, PE, YOY Quarterly Earnings Growth, YOY Quarterly Rev Growth, ROE, Cash Per Share, Total Cash,Total Debt, Debt/Equity, & 1-3 & 5 year returns.

When I opened it up a month or so ago, I decided to add insider ownership figures. To say I was surprised how low the percentages were would be an understatement. Decided to investigate a little further.

According to investopedia, these are the top 25 stocks in the S&P 500.
https://www.investopedia.com/ask/answers/08/find-stocks-in-sp500.asp

Insider ownership % from yahoo finance.
Apparently, it doesn't matter anymore.

Apple Inc. (AAPL) 0.07%
Microsoft (MSFT) 0.05%
Amazon (AMZN) 9.73%
NVIDIA (NVDA) 4.18%
Alphabet (GOOG) 0.01%

Berkshire (BRKB.VI) 0.37%
Tesla, Inc. (TSLA) 13.06%
Meta (META) 0.23%
Exxon Mobil (XOM) 0.06%
UnitedHealth (UNH) 0.27%

Johnson & Johnson (JNJ) 0.10%
JPMorgan Chase (JPM) 0.90%
Visa Inc. (V) 0.12%
Procter & Gamble (PG) 0.12%
Mastercard (MA) 10.74%

Chevron (CVX) 0.04%
Home Depot (HD) 0.08%
AbbVie (ABBV) 0.13%
Eli Lilly (LLY) 0.15%
Merck (MRK) 0.09%

Broadcom (AVGO) 2.27%
PepsiCo (PEP) 0.15%
Coca-Cola (KO) 0.67%
Pfizer (PFE) 0.03%

Warren Buffett alone is said to own 37.4% of Berkshire (never mind Munger and others). The above shows total insider ownership as 0.37%
I would like to know what insider ownership is as Yahoo and others define it.

 

[marko]

As a former insider, I always found it to be more of a PITA, and hardly worth the discounted price.

The company was paranoid about appearnce of impropriety so buying and selling had extremely narrow windows...2 or 3 days a quarter, which I would invariably miss. At least in my company, low insider holdings didn't mean anything.

 

[MichaelB]

As a former insider, I always found it to be more of a PITA, and hardly worth the discounted price.

The company was paranoid about appearnce of impropriety so buying and selling had extremely narrow windows...2 or 3 days a quarter, which I would invariably miss. At least in my company, low insider holdings didn't mean anything.

High holdings may also mean less than meets the eye. My employer required executives receiving stock options to hold shares as well. D level needed to own the equivalent of 2 years salary, C level had to hold 5 years of salary, none of which could be sold while they were under exec comp programs.

Buys and sells by senior execs may be more meaningful.

 

[RxMan]

As any Ford shareholder if it matters and see what answer you get.

 

[matjung]

I think insider ownership especially additions matter a lot.
When an insider purchases every 6 months it can give the signal that the stock is undervalued or that the insider believes into his own leadership talent.
The price per share tends to go up.

If the guys are selling the stock price tends to go down.
I observe the above at smaller and mid sized companies.
When insiders are selling a stock without reason - I also avoid that stock.