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 Standard Chartered PLC (LON:STAN).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 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’.
Check out our latest analysis for Standard Chartered
The Last 12 Months Of Insider Transactions At Standard Chartered
Over the last year, we can see that the biggest insider purchase was by Group Chief Executive & Director William Winters for UK£992k worth of shares, at about UK£6.11 per share. So it’s clear an insider wanted to buy, at around the current price, which is UK£6.59. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it’s a good sign on balance, but keep in mind they may no longer see value. Happily, the Standard Chartered insiders decided to buy shares at close to current prices.
Happily, we note that in the last year insiders paid UK£3.9m for 651k shares. On the other hand they divested 50000 shares, for UK£351k. Overall, Standard Chartered insiders were net buyers last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Insiders at Standard Chartered Have Sold Stock Recently
Over the last three months, we’ve seen notably more insider selling, than insider buying, at Standard Chartered. In that time, insider Tracy Clarke dumped US$351k worth of shares. On the other hand we note insider Tracy Clarke bought US$22k worth of shares. Generally this level of net selling might be considered a bit bearish.
Insider Ownership of Standard Chartered
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Standard Chartered insiders own 0.2% of the company, worth about UK£32m. 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 Standard Chartered Insiders?
The stark truth for Standard Chartered is that there has been more insider selling than insider buying in the last three months. On the other hand, the insider transactions over the last year are encouraging. It’s good to see insiders are shareholders. So the recent selling doesn’t worry us too much. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Standard Chartered.
But note: Standard Chartered 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.