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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Akzo Nobel N.V. (AMS:AKZA), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Akzo Nobel Insider Transactions Over The Last Year
Chairman of the Board of Management & CEO Thierry F. Vanlancker made the biggest insider purchase in the last 12 months. That single transaction was for €250k worth of shares at a price of €86.65 each. That means that even when the share price was higher than €83.31 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders paid €1.1m for 14541.89 shares purchased. In the last twelve months Akzo Nobel insiders were buying shares, but not selling. Their average price was about €76.48. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Akzo Nobel is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Akzo Nobel Have Bought Stock Recently
It's good to see that Akzo Nobel insiders have made notable investments in the company's shares. In total, insiders bought €660k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Insider Ownership of Akzo Nobel
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Akzo Nobel insiders own 0.02% of the company, worth about €2.7m. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Akzo Nobel Tell Us?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Akzo Nobel insiders are expecting a bright future. Of course, the future is what matters most. So if you are interested in Akzo Nobel, you should check out this free report on analyst forecasts for the company.
But note: Akzo Nobel may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.