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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell The Royal Bank of Scotland Group plc (LON:RBS), you may well want to know whether insiders have been buying or selling.
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 logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
The Last 12 Months Of Insider Transactions At Royal Bank of Scotland Group
The , Christopher Marks, made the biggest insider sale in the last 12 months. That single transaction was for UK£657k worth of shares at a price of UK£2.53 each. That means that an insider was selling shares at around the current price of UK£2.33. While we don't usually like to see insider selling, it's more concerning if the sales take price 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. Christopher Marks was the only individual insider to sell shares in the last twelve months.
Happily, we note that in the last year insiders paid UK£320k for 139k shares. On the other hand they divested 260k shares, for UK£657k. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Royal Bank of Scotland Group Have Sold Stock Recently
There was substantially more insider selling, than buying, of Royal Bank of Scotland Group shares over the last three months. In total, Christopher Marks sold UK£657k worth of shares in that time. On the other hand we note insiders bought UK£300 worth of shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
Does Royal Bank of Scotland Group Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Royal Bank of Scotland Group insiders own about UK£10m worth of shares. That equates to 0.04% 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 Royal Bank of Scotland Group Insider Transactions Indicate?
The stark truth for Royal Bank of Scotland Group is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Royal Bank of Scotland Group is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Royal Bank of Scotland Group.
Of course Royal Bank of Scotland Group 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.