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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Hays plc (LON:HAS).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Hays Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Group Finance Director & Executive Director Paul Venables for UK£2.1m worth of shares, at about UK£2.04 per share. Although we don't gain confidence from insider selling, we note that this large sale was at well above current price of UK£1.47. So it is hard to draw any strong conclusion from it.
Happily, we note that in the last year insiders paid UK£7.7k for 4.81k shares. On the other hand they divested 2.57m shares, for UK£4.7m. All up, insiders sold more shares in Hays than they bought, over the last year. They sold for an average price of about UK£1.84. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (UK£1.47), so it probably doesn't tell us a lot about the value on offer today. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Hays insiders own about UK£8.8m worth of shares. That equates to 0.4% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Hays Insider Transactions Indicate?
The fact that there have been no Hays insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by Hays insiders. And usually insiders own more stock in the company, according to our data. Of course, the future is what matters most. So if you are interested in Hays, you should check out this free report on analyst forecasts for the company.
Of course Hays may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.