CBA (ASX:CBA) share price on watch as CEO sells $1.4m of shares

CBA’s CEO has been selling shares…

| More on:
An analyst wearing a dark blue shirt and glasses sits at his computer with his chin resting on his hands as he looks at the CBA share price movement today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • CBA's CEO has been selling shares on-market.
  • Matt Comyn offloaded $1.4 million worth of shares on Tuesday.
  • Though, the CEO of Australia's largest bank still has a significant interest.

Insider buying is often regarded as a bullish indicator. This is because few people should know a company better than its own directors.

The theory is that if they have the confidence to buy shares, it could be a sign that things are going well and they expect them to appreciate in value.

Conversely, when directors sell shares, it is often regarded as a bearish signal. After all, you’d be unlikely to sell shares if you thought they were about to increase in value.

With that in mind, this morning Commonwealth Bank of Australia (ASX: CBA) revealed that an insider has been selling some of the banking giant’s shares.

What did CBA announce?

According to a change of director’s interest notice from this morning, CBA Chief Executive Officer (CEO), Matt Comyn, has been trimming down his holding this week.

The notice reveals that Mr Comyn sold a total of 13,520 shares through an on-market trade on Tuesday 15 March 2022. This represented 21.2% of Comyn’s direct interest in the bank, reducing his direct holding down to 50,003 shares.

The leader of Australia’s largest bank received an average of $103.40 per share, which equates to a total consideration of approximately $1.4 million.

Time to panic?

While the CBA share price has rallied hard and is trading within touching distance of its record high, it may be unwise to panic.

After all, Comyn still has a sizeable direct holding of CBA shares with a market value of ~$5.3 million. In addition, the CEO has a hefty indirect holding of 32,084 shares and countless performance rights that could vest in the coming years.

This, you could argue, means that the CEO’s interests remain firmly aligned with shareholders’ interests.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

A man smiles as he holds bank notes in front of a laptop.
Bank Shares

ANZ share price on watch following equity raising update

ANZ has raised money to fund an acquisition...

Read more »

ASX 300 share investors in suits running a race on an athletics track
Bank Shares

Up 10%, why has the Westpac share price smashed other ASX banks this past month?

The Westpac share price has surged this month despite rocky Q3 earnings results.

Read more »

Confident male executive dressed in a dark blue suit leans against a doorway with his arms crossed in the corporate office
Bank Shares

The NAB share price has gained 5% since last week’s update. What’s next?

NAB shares are in focus as the big bank steadily climbs on the ASX.

Read more »

Two businesspeople in suits run, one chasing the other.
Bank Shares

Can ANZ’s latest acquisition help it catch up to the other ASX 200 bank shares?

How much of a difference will buying Suncorp’s bank make? We take a look.

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Bank Shares

Why is the CBA share price sliding today?

CBA shares are trading without rights on Wednesday.

Read more »

Woman on her laptop thinking to herself.
Bank Shares

Is the Bendigo Bank share price in the buy zone following Monday’s sell-off?

A broker gives its thoughts on the bank share's outlook following its post-earnings slump.

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Bank Shares

Is the Westpac share price a buy following the bank’s latest update?

Are Westpac shares a buy after its latest update?

Read more »

A man sitting at his dining table looks at his laptop and ponders the CSL balance sheet and the value of CSL shares today
Bank Shares

Is the CBA share price overvalued compared to other ASX 200 banks?

CommBank is the most exposed to any downturn in the Aussie housing market.

Read more »