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 we'll take a look at whether insiders have been buying or selling shares in Suncorp Group Limited (ASX:SUN).
What Is Insider Selling?
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, 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'.
Suncorp Group Insider Transactions Over The Last Year
Chairman Christine McLoughlin made the biggest insider purchase in the last 12 months. That single transaction was for AU$348k worth of shares at a price of AU$14.50 each. That means that even when the share price was higher than AU$13.68 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Over the last year, we can see that insiders have bought 58900 shares worth AU$828k. Suncorp Group may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Suncorp Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Suncorp Group Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Suncorp Group. In total, insiders bought AU$109k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Insider Ownership of Suncorp Group
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Suncorp Group insiders own about AU$16m worth of shares. That equates to 0.09% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Suncorp Group Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Suncorp Group we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in Suncorp Group, you should check out this free report on analyst forecasts for the company.
Of course Suncorp Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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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.