Challenger Insider Lowered Holding By 16% During Last Year

From what we can see, insiders were net sellers in Challenger Limited's (ASX:CGF ) during the past 12 months. That is, insiders sold the stock in greater numbers than they purchased it.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Challenger Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the MD, CEO & Director, Nicolas Hamilton, for AU$605k worth of shares, at about AU$6.22 per share. That means that even when the share price was below the current price of AU$7.78, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 16% of Nicolas Hamilton's holding. Nicolas Hamilton was the only individual insider to sell shares in the last twelve months.

Happily, we note that in the last year insiders paid AU$180k for 29.89k shares. But they sold 202.48k shares for AU$1.3m. Nicolas Hamilton ditched 202.48k shares over the year. The average price per share was AU$6.46. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Challenger

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Challenger Insiders Are Selling The Stock

We have seen a bit of insider selling at Challenger, over the last three months. AU$108k worth of shares were sold by MD, CEO & Director Nicolas Hamilton. But the good news is that there was purchasing too , worth AU$50k. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own AU$7.3m worth of Challenger stock, about 0.1% of the company. We prefer to see high levels of insider ownership.

What Might The Insider Transactions At Challenger Tell Us?

Unfortunately, there has been more insider selling of Challenger stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. When you combine this with the relatively low insider ownership, we are very cautious about the stock. So we're not rushing to buy, to say the least. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Challenger. Every company has risks, and we've spotted 3 warning signs for Challenger you should know about.

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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.