16% Of This Challenger Insider's Holdings Were Sold

Looking at Challenger Limited's (ASX:CGF ) insider transactions over the last year, we can see that insiders were net sellers. That is, there were more number of shares sold by insiders than there were purchased.

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

Check out our latest analysis for Challenger

The Last 12 Months Of Insider Transactions At Challenger

The MD, CEO & Director, Nicolas Hamilton, made the biggest insider sale in the last 12 months. That single transaction was for AU$605k worth of shares at a price of AU$6.22 each. That means that an insider was selling shares at slightly below the current price (AU$6.62). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 16% of Nicolas Hamilton's holding. The only individual insider seller over the last year was Nicolas Hamilton.

Over the last year, we can see that insiders have bought 25.60k shares worth AU$153k. On the other hand they divested 97.33k shares, for AU$605k. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insiders At Challenger Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at Challenger. We note MD, CEO & Director Nicolas Hamilton cashed in AU$605k worth of shares. On the other hand we note Independent Non-Executive Director Lisa Gray bought AU$50k worth of shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.

Does Challenger Boast High Insider Ownership?

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From looking at our data, insiders own AU$6.7m worth of Challenger stock, about 0.1% of the company. We consider this fairly low insider ownership.

What Might The Insider Transactions At Challenger Tell Us?

The stark truth for Challenger is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. When you consider that most companies have higher levels of insider ownership, we're a little wary. So we're not rushing to buy, to say the least. 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. While conducting our analysis, we found that Challenger has 4 warning signs and it would be unwise to ignore these.

But note: Challenger 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.