The Walton Family Holdings Trust, which belongs to Walmart’s (WMT) founding family and is also a majority shareholder (more than 10% owner) of the American big-box retailer sold WMT stock worth $527.55 million last week. This is the second big Informative Sell transaction by the trust this year. The Walton Family Holdings Trust is by far the largest shareholder of Walmart and also has the most voting power.
Walmart was founded by the Walton Family brothers, Sam and Bud Walton, nearly six decades ago. Remarkably, the Walton family’s combined wealth positions them among the wealthiest families in the world. The large, recurrent stock sales by the Walton family have surprised many investors. The family could be worried about the potential negative impact of Trump’s Tariffs on Walmart’s performance. Notably, almost 70%-80% of the goods sold at the retail giant are imported from China, and Trump’s massive tariffs stand to dramatically shoot up their prices.
A corporate insider’s share sale usually signals caution about the company’s future potential. However, an insider might sell shares for other reasons, such as financial or personal obligations.
A Closer Look at the Insider’s Transactions
According to a Form 4 filed with the SEC on March 14, the Walton Family Holdings Trust sold 6,203,547 WMT stock on that same day. The shares were sold in multiple tranches at weighted average price of $85.0494 apiece. Unfortunately, Walmart stock has lost 17.8% over the past month. The recent average selling price of the Walton family’s trade is nearly 13% lower than their February sale, which was valued at $228 million.
Simultaneously, the Form 4 also disclosed a distribution of 2.81 million common shares to beneficiaries of the trust on March 12, which was carried out without any monetary exchange.
It is worth noting that following the latest share sale, the trust still owns 582,522,458 WMT common shares worth $49.72 billion, based on Friday’s closing stock price of $85.35. The exact intent of the trust’s share sale remains unknown at the moment.
WMT stock currently has a Very Negative Insider Confidence Signal on TipRanks, based on Informative Sell transactions worth $1.7 billion undertaken in the last three months, of which the Walton Family Holdings Trust remains the largest seller.
It is important to keep an eye on the Informative trades of corporate insiders, given their knowledge of a company’s growth potential. Interestingly, TipRanks offers daily insider transactions as well as a list of top corporate insiders. It also provides a list of hot stocks that boast either a Very Positive or Positive insider confidence signal.
Is Walmart Stock Good to Buy?
Wall Street, indeed, remains highly bullish about Walmart’s stock trajectory. On TipRanks, WMT stock has a Strong Buy consensus rating based on 27 Buys versus one Hold rating. The average Walmart price target of $111.96 implies 31.2% upside potential from current levels. In the past year, WMT stock has gained 41.5%.
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