Don't Ignore The Insider Selling In SEEK

Some SEEK Limited (ASX:SEK) shareholders may be a little concerned to see that the CEO, MD & Executive Director, Ian Narev, recently sold a substantial AU$2.0m worth of stock at a price of AU$25.75 per share. That's a big disposal, and it decreased their holding size by 16%, which is notable but not too bad.

Check out our latest analysis for SEEK

The Last 12 Months Of Insider Transactions At SEEK

The Co-Founder & Non-Executive Director, Andrew Bassat, made the biggest insider sale in the last 12 months. That single transaction was for AU$5.0m worth of shares at a price of AU$24.92 each. So we know that an insider sold shares at around the present share price of AU$23.98. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Over the last year, we can see that insiders have bought 2.76k shares worth AU$62k. On the other hand they divested 292.26k shares, for AU$7.3m. Over the last year we saw more insider selling of SEEK shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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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Insider Ownership Of SEEK

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that SEEK insiders own 4.2% of the company, worth about AU$359m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At SEEK Tell Us?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 3 warning signs for SEEK that deserve your attention before buying any shares.

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 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.