Need To Know: iCollege Limited (ASX:ICT) Insiders Have Been Selling Shares

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in iCollege Limited (ASX:ICT).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.

Check out our latest analysis for iCollege

The Last 12 Months Of Insider Transactions At iCollege

Over the last year, we can see that the biggest insider sale was by the MD & Director, Ashish Katta, for AU$990k worth of shares, at about AU$0.06 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$0.12. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 23% of Ashish Katta's holding. The only individual insider seller over the last year was Ashish Katta.

Over the last year, we can see that insiders have bought 2.14m shares worth AU$215k. But insiders sold 16.50m shares worth AU$990k. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Have iCollege Insiders Traded Recently?

There was some insider buying at iCollege over the last quarter. Non-Executive Non-Independent Chairman Simon Tolhurst purchased AU$10.0k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does iCollege Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 30% of iCollege shares, worth about AU$20m. 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 iCollege Tell Us?

We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. Still, the insider transactions at iCollege in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 3 warning signs for iCollege (1 is a bit concerning) you should be aware of.

Of course iCollege may not be the best stock to buy. So you may wish to see this free collection of high quality 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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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.
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