Insiders sold AU$1.4m worth of The Sustainable Nutrition Group Ltd (ASX:TSN) stock last year, could be a warning sign to watch out for

While The Sustainable Nutrition Group Ltd (ASX:TSN) shareholders have enjoyed a good week with stock up 13%, they need remain vigilant. Even though stock prices were relatively low, insiders elected to sell AU$1.4m worth of stock in the last year, which could indicate some expected downturn.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Sustainable Nutrition Group

Sustainable Nutrition Group Insider Transactions Over The Last Year

The insider, Charles Mann, made the biggest insider sale in the last 12 months. That single transaction was for AU$1.4m worth of shares at a price of AU$0.15 each. That means that even when the share price was below the current price of AU$0.18, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 84% of Charles Mann's stake.

Insiders in Sustainable Nutrition Group didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Sustainable Nutrition Group Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Sustainable Nutrition Group shares. In total, insiders sold AU$1.4m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership of Sustainable Nutrition Group

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. Sustainable Nutrition Group insiders own about AU$4.5m worth of shares. That equates to 21% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Sustainable Nutrition Group Insider Transactions Indicate?

Insiders sold Sustainable Nutrition Group shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. 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. Be aware that Sustainable Nutrition Group is showing 7 warning signs in our investment analysis, and 2 of those are a bit concerning...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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. 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.