We often see insiders buying up shares in companies that perform well over the long term. 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 International Consolidated Airlines Group, S.A. (LON:IAG), 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.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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'.
International Consolidated Airlines Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the CEO & Executive Director, William Walsh, for UK£3.6m worth of shares, at about UK£5.09 per share. So what is clear is that an insider saw fit to sell at around the current price of UK£4.99. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. William Walsh was the only individual insider to sell shares in the last twelve months. Notably William Walsh was also the biggest buyer, having purchased UK£560k worth of shares.
Happily, we note that in the last year insiders paid UK£560k for 101100 shares. But they sold 1400000 for UK£7.1m. William Walsh sold a total of 1400000 shares over the year at an average price of €5.08. 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. International Consolidated Airlines Group insiders own about UK£22m worth of shares. That equates to 0.2% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About International Consolidated Airlines Group Insiders?
The fact that there have been no International Consolidated Airlines Group insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by International Consolidated Airlines Group insiders. But we do like the fact that insiders own a fair chunk of the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for International Consolidated Airlines Group.
But note: International Consolidated Airlines Group 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.