Have Insiders Been Selling InvoCare Limited (ASX:IVC) Shares?

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 InvoCare Limited (ASX:IVC).

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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.

Check out our latest analysis for InvoCare

InvoCare Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Richard Davis, sold AU$141k worth of shares at a price of AU$14.05 per share. So what is clear is that an insider saw fit to sell at around the current price of AU$12.30. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Richard Davis was the only individual insider to sell over the last year.

Over the last year, we can see that insiders have bought 5.08k shares worth AU$75k. But insiders sold 10000 shares worth AU$141k. 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!

ASX:IVC Recent Insider Trading, March 23rd 2020
ASX:IVC Recent Insider Trading, March 23rd 2020

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

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, InvoCare insiders have about 0.2% of the stock, worth approximately AU$3.8m. I generally like to see higher levels of ownership.

So What Does This Data Suggest About InvoCare Insiders?

It doesn’t really mean much that no insider has traded InvoCare shares in the last quarter. The insider transactions at InvoCare are not inspiring us to buy. And we’re not picking up on high enough insider ownership to give us any 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. When we did our research, we found 2 warning signs for InvoCare (1 is a bit concerning!) that we believe deserve your full attention.

Of course InvoCare 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.

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.

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. Thank you for reading.