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Walmart Could be Bearish, as Insiders are Selling

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Many Walmart Inc. (NYSE: WMT) insiders sold a significant position in the firm in the recent year, which may have piqued the interest of shareholders. Knowing whether insiders are buying or selling is usually more useful when examining insider transactions, as the latter can be susceptible to different interpretations. However, if a large number of insiders are selling, shareholders should conduct additional research.

While insider transactions are not the most crucial factor in long-term investment, logic says that you should be aware of whether insiders are buying or selling shares.

Insider Transactions at Walmart in the Last Year

The largest single sale by an insider in the last twelve months occurred when the Advisor, M. Biggs, sold US$3.1m worth of shares at a price of US$140 per share. That suggests an insider was selling shares at a price lower than the current market price (US$142). We usually consider it a negative if insiders have been selling, especially if they did so at a lower price than the current one because it shows that they thought a lower price was reasonable. While insider selling can be disappointing, it is merely a faint indication. It is worth noting that this transaction represented only 8.2% of M. Biggs’ stake.

Walmart insiders have not purchased any shares in the recent year. A visual representation of insider transactions (by corporations and people) during the last 12 months, can be found online, where you can see all of the individual transactions by clicking on the chart, including the share price, personal, and date!

Walmart Insiders Have Recently Sold Stock

Walmart has seen major insider selling over the last three months. Insiders sold $9.0 million in shares during that time period, and we didn’t register any purchases. This could imply that some insiders believe the stock is overpriced.

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Does Walmart have a high level of insider ownership?

Another technique to assess the alignment between a company’s management and other shareholders is to examine how many shares they own. A high level of insider ownership sometimes causes firm leadership to be more concerned with shareholder concerns. Walmart insiders own 0.9% of the company, which is now worth around US$3.5 billion based on the current share price. This amount of insider ownership is appealing to me since it enhances the likelihood that management is thinking about the best interests of shareholders.

So, What Do Walmart Insider Transactions Mean?

Insiders have recently sold stock, but they have not been buying. Even looking back a year, we don’t notice any purchases. However, because Walmart is successful and growing, we are not concerned. While insiders control a large number of shares in the company (which is positive), our study of their transactions does not inspire confidence in the organization. So, while insider transactions can help us construct a thesis about the stock, it’s equally important to understand this company’s risks.

What about upgrades and downgrades by analysts?

Several research analyst papers have focused on WMT. In a research note issued on Tuesday, October 18th, Jefferies Financial Group raised their price target on Walmart from $161.00 to $165.00 and assigned the stock a “buy” rating. In a research note released on Tuesday, November 15th, Robert W. Baird raised their price target for Walmart from $155.00 to $165.00. In a research note issued on Wednesday, November 16th, Citigroup raised its price objective on Walmart stock from $162.00 to $169.00. In a research report issued on Wednesday, November 16th, Raymond James raised their price target on Walmart from $150.00 to $160.00. Finally, in a research note issued on Thursday, December 8th, UBS Group set a $170.00 price target on shares of Walmart. One analyst has given the stock a sell rating, nine have given it a hold recommendation, eighteen have given it a buy rating, and one has given it a strong buy rating. MarketBeat.com data show that the stock currently has a consensus rating of “Moderate Buy” with an average price target of $160.58.

About Walmart

Walmart Inc operates retail, wholesale, and other businesses around the world. Walmart U.S., Walmart International, and Sam’s Club are the company’s three divisions. It runs supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, and discount stores; membership-only warehouse clubs; e-commerce websites like walmart.com, walmart.com.mx, walmart.ca, flipkart.com, and samsclub.com; and mobile commerce apps.

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