Don't Ignore The Insider Selling In GenusPlus Group

We wouldn't blame GenusPlus Group Ltd (ASX:GNP) shareholders if they were a little worried about the fact that David Riches, the Founder recently netted about AU$7.4m selling shares at an average price of AU$5.50. However, that sale only accounted for 1.5% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At GenusPlus Group

In fact, the recent sale by David Riches was the biggest sale of GenusPlus Group shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was below the current price of AU$6.21, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 1.5% of David Riches's holding.

Insiders in GenusPlus Group didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and 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!

Check out our latest analysis for GenusPlus Group

I will like GenusPlus Group better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does GenusPlus Group Boast High Insider Ownership?

Many investors like to check how much of a company is owned by 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. GenusPlus Group insiders own about AU$639m worth of shares (which is 57% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The GenusPlus Group Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that GenusPlus Group is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - GenusPlus Group has 1 warning sign we think you should be aware of.

But note: GenusPlus Group 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.