Insiders probably made the right decision selling AU$3.3m worth of shares earlier this year as Seven Group Holdings Limited's (ASX:SVW)) stock dips by 3.9%.

By
Simply Wall St
Published
April 11, 2022
ASX:SVW
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling AU$3.3m worth of Seven Group Holdings Limited (ASX:SVW) stock at an average sell price of AU$21.59 during the past year. The company's market valuation decreased by AU$312m after the stock price dropped 3.9% over the past week, but insiders were spared from painful losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Seven Group Holdings

Seven Group Holdings Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Non-Executive Director, Richard Uechtritz, for AU$3.3m worth of shares, at about AU$21.73 per share. So what is clear is that an insider saw fit to sell at around the current price of AU$20.93. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). Richard Uechtritz was the only individual insider to sell over the last year.

Happily, we note that in the last year insiders paid AU$273k for 12.44k shares. On the other hand they divested 152.15k shares, for AU$3.3m. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
ASX:SVW Insider Trading Volume April 11th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Seven Group Holdings Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Seven Group Holdings. In total, Independent Non-Executive Director Richard Uechtritz dumped AU$3.3m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership of Seven Group Holdings

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.3% of Seven Group Holdings shares, worth about AU$26m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Seven Group Holdings Tell Us?

An insider sold Seven Group Holdings shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Seven Group Holdings makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For instance, we've identified 4 warning signs for Seven Group Holdings (2 are concerning) you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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