MD, CEO & Director Kevin Gallagher Just Sold A Bunch Of Shares In Santos Limited (ASX:STO)

By
Simply Wall St
Published
April 10, 2020
ASX:STO
Source: Shutterstock

Some Santos Limited (ASX:STO) shareholders may be a little concerned to see that the MD, CEO & Director, Kevin Gallagher, recently sold a whopping AU$2.2m worth of stock at a price of AU$4.29 per share. That sale reduced their total holding by 26% which is hardly insignificant, but far from the worst we've seen.

View our latest analysis for Santos

Santos Insider Transactions Over The Last Year

In fact, the recent sale by Kevin Gallagher was the biggest sale of Santos shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$4.61. 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. 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 26%of Kevin Gallagher's holding.

In the last twelve months insiders purchased 50.55k shares for AU$201k. On the other hand they divested 515755 shares, for AU$2.2m. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

ASX:STO Recent Insider Trading April 10th 2020
ASX:STO Recent Insider Trading April 10th 2020

I will like Santos better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Santos Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.1% of Santos shares, worth about AU$10m, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About Santos Insiders?

The stark truth for Santos is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Santos makes money, and is growing profits. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! 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. You'd be interested to know, that we found 4 warning signs for Santos and we suggest you have a look.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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