It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell Brambles Limited (ASX:BXB), you may well want to know whether insiders have been buying or selling.
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, such insiders must disclose their trading activities, and not trade on inside information.
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. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
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The Last 12 Months Of Insider Transactions At Brambles
Over the last year, we can see that the biggest insider purchase was by Elizabeth Fagan for AU$218k worth of shares, at about AU$10.92 per share. That means that an insider was happy to buy shares at around the current price of AU$12.48. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today’s share price, as the discount to value may have narrowed with the rising price. The good news for Brambles share holders is that insiders were buying at near the current price.
In the last twelve months insiders paid AU$228k for 20955 shares purchased. In the last twelve months Brambles insiders were buying shares, but not selling. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Brambles 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.
Are Brambles Insiders Buying Or Selling?
There was only a small bit of insider buying, worth US$2.1k, in the last three months. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own AU$3.4m worth of Brambles stock, about 0.02% of the company. I generally like to see higher levels of ownership.
So What Do The Brambles Insider Transactions Indicate?
Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we’d be more comfortable if they owned more Brambles stock. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at email@example.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.