We often see insiders buying up shares in companies that perform well over the long term. 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 Siemens Gamesa Renewable Energy, S.A. (BME:SGRE).
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 in the company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. 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.
Siemens Gamesa Renewable Energy Insider Transactions Over The Last Year
CEO & Executive Director Markus Tacke made the biggest insider purchase in the last 12 months. That single transaction was for €59k worth of shares at a price of €11.80 each. Even though the purchase was made at a significantly lower price than the recent price (€15.36), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn’t tell us much about what they think of current prices.
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!
Siemens Gamesa Renewable Energy 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.
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From what we can see in our data, insiders own only about €113k worth of Siemens Gamesa Renewable Energy shares. This level of insider ownership is notably low, and not very encouraging.
So What Does This Data Suggest About Siemens Gamesa Renewable Energy Insiders?
It doesn’t really mean much that no insider has traded Siemens Gamesa Renewable Energy shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Siemens Gamesa Renewable Energy insiders are doubting the company. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Siemens Gamesa Renewable Energy. While conducting our analysis, we found that Siemens Gamesa Renewable Energy has 1 warning sign and it would be unwise to ignore it.
But note: Siemens Gamesa Renewable Energy 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.
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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.