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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 we'll take a look at whether insiders have been buying or selling shares in Securitas AB (STO:SECU B).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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.'
Securitas Insider Transactions Over The Last Year
The , Marc Pissens, made the biggest insider sale in the last 12 months. That single transaction was for kr6.4m worth of shares at a price of kr166 each. That means that even when the share price was slightly below the current price of kr167, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 60.7% of Marc Pissens's stake.
Happily, we note that in the last year insiders paid kr15m for 98780 shares. But insiders sold 68957 shares worth kr11m. In the last twelve months there was more buying than selling by Securitas insiders. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Securitas Have Sold Stock Recently
Over the last three months, we've seen notably more insider selling, than insider buying, at Securitas. We note insiders cashed in kr7.9m worth of shares. Meanwhile Senior Vice President & General Counsel Frida Rosenholm bought kr75k worth. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Securitas insiders own 0.2% of the company, worth about kr101m. 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 Does This Data Suggest About Securitas Insiders?
Unfortunately, there has been more insider selling of Securitas stock, than buying, in the last three months. In contrast, they appear keener if you look at the last twelve months. On top of that, insiders own a significant portion of the company. So the recent selling doesn't worry us. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Securitas.
Of course Securitas may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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.