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 we'll take a look at whether insiders have been buying or selling shares in Aviva plc (LON:AV.).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
The Last 12 Months Of Insider Transactions At Aviva
The Executive Officer, Andrew Briggs, made the biggest insider sale in the last 12 months. That single transaction was for UK£236k worth of shares at a price of UK£4.12 each. That means that an insider was selling shares at around the current price of UK£3.98. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Andrew Briggs was the only individual insider to sell shares in the last twelve months. Notably Andrew Briggs was also the biggest buyer, having purchased UK£263k worth of shares.
Happily, we note that in the last year insiders paid UK£263k for 66168 shares. But they sold 57399 for UK£236k. In total, Aviva insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders at Aviva Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Aviva. We can see that Senior Independent Director Glyn Barker paid UK£98k for shares in the company. No-one sold. That shows some optimism about the company's future.
Insider Ownership of Aviva
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 0.08% of Aviva shares, worth about UK£13m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Aviva Tell Us?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Aviva shares, given these transactions (along with notable insider ownership of the company). Of course, the future is what matters most. So if you are interested in Aviva, you should check out this free report on analyst forecasts for the company.
But note: Aviva 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 currently account for open market transactions and private dispositions, but not derivative transactions.
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 email@example.com. 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.