PRU

Prudential ($PRU) Shocking Insider Trading: Executives Sell at $126 vs Major Shareholder Buys at $28

06/20/2025 03:46

Prudential Financial ($PRU) is displaying a fascinating pattern of contrasting insider trading behaviors that's capturing market attention. This major life insurance and investment management company, established in 1875, is witnessing diametrically opposite investment actions between its executives and major shareholders. The most striking development was CEO Charles Lowrey's massive stock sales in November 2024. Over two days (November 6-7), he disposed of 185,653 shares worth approximately $23.5 million at an average price of $126.65 per share. These transactions occurred near the stock's peak levels. Simultaneously, EVP Robert Falzon also sold 52,737 shares for $6.76 million. In stark contrast to executive selling, major shareholder Prudential Insurance has been consistently buying shares. From October 2024 through June 2025, total purchases exceeded $150 million. Most notably, the buying prices tell a compelling story. The most recent purchase on June 16, 2025, involved $48 million worth of shares at just $28.64 per share. This dramatic contrast - executives selling at $126 while the major shareholder buys at $28 - suggests fundamental disagreement beyond mere timing differences. With current share price at $104, the major shareholder is purchasing at prices 73% below current market levels. Underlying these contrasting behaviors is the company's deteriorating performance. Q1 2025 revenue dropped 43% year-over-year to $13.5 billion, while net income fell 38% to $697 million. International business segment weakness particularly pressures overall profitability. Stock performance reflects these operational challenges. After starting 2024 at $114, shares reached $121 in July before plummeting to $100 following August earnings. Recovery attempts were short-lived, with shares declining further in 2025, touching $95 in April before recovering to current $104 levels. Despite performance headwinds, the major shareholder's persistent buying suggests confidence in long-term value. Prudential maintains a $36.8 billion market cap, holds $38 billion in cash, and offers a 5.19% dividend yield. While the 148% debt-to-equity ratio appears elevated, it's manageable for an insurance company. Investors should closely monitor the spread between major shareholder purchase prices and current market levels. Should shares approach the $28 buying level, it could signal a strong floor. Conversely, continued decline from current levels might indicate deeper structural issues. The company recently appointed Andrew Sullivan as new CEO, initiating management renewal efforts. Focus on international business restructuring and U.S. domestic operations strengthening will likely determine future performance recovery. Optimistic scenarios envision successful restructuring driving shares above $120. Base case suggests $100-110 range consolidation with gradual recovery. However, continued performance deterioration could push shares toward the $80 level where major shareholder purchases concentrate. Monitoring major shareholder activity remains crucial. Cessation of purchases or higher purchase prices could signal bottom formation, while expanded buying might indicate further downside potential.

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