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Need To Know: The Citadel Group Limited (ASX:CGL) Insiders Have Been Selling Shares

Simply Wall St

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in The Citadel Group Limited (ASX:CGL).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. 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'.

View our latest analysis for Citadel Group

Citadel Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Miles Jakeman, sold AU$6.0m worth of shares at a price of AU$7.55 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (AU$3.55). So it may not tell us anything about how insiders feel about the current share price. Miles Jakeman was the only individual insider to sell over the last year.

Over the last year, we can see that insiders have bought 65885 shares worth AU$280k. But insiders sold 800000 shares worth AU$6.0m. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

ASX:CGL Recent Insider Trading, November 12th 2019

I will like Citadel Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Citadel Group Insiders Bought Stock Recently

There was some insider buying at Citadel Group over the last quarter. Insiders shelled out AU$51k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership of Citadel Group

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 28% of Citadel Group shares, worth about AU$49m. 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 Citadel Group Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. On the other hand the transaction history, over the last year, isn't so positive. While recent transactions indicate confidence in Citadel Group, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Citadel Group.

But note: Citadel 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 editorial-team@simplywallst.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.