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 Australia and New Zealand Banking Group Limited (ASX:ANZ).
What Is Insider Buying?
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.
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. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.
Australia and New Zealand Banking Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Ronald MacIntyre, for AU$196k worth of shares, at about AU$25.08 per share. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of AU$16.52. So it may not tell us anything about how insiders feel about the current share price.
Insiders in Australia and New Zealand Banking Group didn’t buy any shares in the last year. 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!
I will like Australia and New Zealand Banking 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.
For a common shareholder, it is worth checking how many shares are held by company 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. It appears that Australia and New Zealand Banking Group insiders own 0.04% of the company, worth about AU$17m. 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 Does This Data Suggest About Australia and New Zealand Banking Group Insiders?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. Still, the insider transactions at Australia and New Zealand Banking Group in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. Our analysis shows 3 warning signs for Australia and New Zealand Banking Group (1 can’t be ignored!) and we strongly recommend you look at these before investing.
Of course Australia and New Zealand Banking Group 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 currently account for open market transactions and private dispositions, but not derivative transactions.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.